Business Insurance

All business owners should take note that effective risk management proves to insurers that you are worthy of insurances discounts.

For example if you do not prove to insurers that you have effective risk management procedures which are implemented, adhered to and reviewed regularly then you will not receive the full range of discounts insurers offer.

The types of insurances any business should be looking for are:

1. Employers Liability (Compulsory class of insurance since 1971) for any company/persons who employs.

2. Public Liability, liability for death, injury or illness or property damage to third parties and or their property

3. Product liability, legal liability for death, injury or illness or property damage to third parties and or their property raising from product supplied

4. Professional indemnity, if your client suffers a financial loss due to your advice

5. Directors & Officers; All directors have personal and unlimited liability when running a limited liability company

Employers’ Liability

By law, all employers must insure against their legal liability for injury, disease or death to employees sustained by them and arising from their employment.
Employees will normally include, in addition to those under a contract of employment, apprentices and other trainees and those hired from another employer not forgetting volunteers. The only exception is where all your employees are close relatives and you should check if you think that this may apply to you.
You are legally required to insure for at least £5 million but in practice, most policies offer £10 million minimum cover. The law also requires that you exhibit a certificate of employers’ liability insurance at each place of work. Failure to meet this requirement could constitute a criminal offence.

Public Liability

Public liability insurance covers your legal liability to pay damages to members of the public for death, bodily injury or damage to their property which occurs as a result of your business activities.
It also covers legal fees, costs and expenses such as representation at any coroner’s inquest, fatal accident enquiry or other court hearing because of an accident.
When deciding on how much cover to buy, you should carefully consider the maximum claim that could be made against you. Awards for injury can exceed £1 million.
Certain businesses, where there is a spreading fire or possibility of multiple personal injuries, could face claims for damages far exceeding this figure.
The limit of indemnity will apply to claims arising from a single incident.

Product Liability

If you make, repair or sell products, you could be held legally liable for damage or injury arising from defects in their design or manufacture even if you have not been negligent. Product liability insurance covers you in these circumstances up to a maximum amount each year.
The Consumer Protection Act 1987 makes it a criminal offence to supply unsafe consumer goods.

Professional Indemnity Insurance

All professionals are exposed to claims and law suits in the event that they give negligent advice.
Sometimes referred to errors & omissions (E&O) protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.
Professional liability insurance is required by law in some areas for certain kinds of professional practice and is also sometimes required under contract by other businesses that are the beneficiaries of the advice or service. Even charities and Non profit organisations need the cover even though they may no receive a fee for the advice supplied.

Directors & Officers Insurance

As a company director or senior executive you may incur certain personal liabilities through negligence, default, breach of duty or breach of trust in relation to the company which may leave you open to litigation and exposed to compensation claims, lawsuits, investigations and prosecutions.
In such cases, you could be faced with significant legal expenses and other costs as you seek to defend yourself against allegations or if you have claims awarded against you.
In the absence of any other remedy, you would have to finance such action from your own resources including the settlement of any successful claim which, at worst, could put at risk your home, car, savings and other assets.
Directors and Officers (“D&O”) liability insurance is designed to provide cover for legal defence costs and, where appropriate, any final settlement or compensation award.

Risk Areas

We live in an increasingly regulated world and the risk of directors and senior executive management incurring personal liabilities has increased dramatically in recent years especially in the following key areas:
Involuntary, constructive or gross negligence manslaughter
Health & Safety legislation
Sexual, racial, disability or age discrimination
Wrongful or constructive dismissal
Wrongful trading such as in the knowledge that the business is or will become insolvent
Unpaid taxes when the company has become insolvent
Competition and cartel activity
Copyright and other intellectual property
Data protection
E business
Environmental issues
You can also be held personally liable for the actions, errors and omissions of others.

To discuss further please call Nick on 07738 184 148 or alternatively you can email nick.taylor-ward@bluefingroup.co.uk (QUOTE W001)