Liability Insurance

What is Liability Insurance?

It protects the policyholder in respect of claims made against them in respect of their legal liability for personal injury or property damage arising out of and in the course of the business.

It is essential that you understand the basis of the cover under liability policies. Many people ask questions such as “Does it cover me for this”, the exact circumstances of how a claim might arise can never be fully explained. The key aspect is that the policies protect you in respect of your legal liability. If you have the cover in place, arranged correctly, then the policy will respond to both defend your legal position and meet any compensatory awards made against you.

Who needs liability insurance?

Every company, organisation or sole trader in the United Kingdom should be considering their liability insurance requirements and how they can protect themselves against significant financial loss brought about by legal actions against them.

Public liability insurance is not a legal requirement for all but a few specialised businesses, but these days it should be viewed as essential for all those engaged in business on whatever scale. Businesses of all sizes face the daily threat of action being taken against them in respect of their liability for injuries or property damage sustained by third parties. The costs associated with defending these claims and the awards if successful can be a severe threat to the success and even existence of the business.

Product liability protects the policyholder against claims made against them in respect of their legal liability for personal injury or property damage arising from the supply of a product.

If you employ people in the United Kingdom, then you will require employers liability insurance. There are a few exceptions to this and more information is available on our main employers liability insurance page.

Contract Requirements

Increasingly firms and businesses are required by the terms of contracts they have with employers to hold a policy for public liability with a specified or set limit of indemnity

How much liability cover do I need?

Sums insured under liability policies are referred to as limits of indemnity. This reflects the insurance companies maximum responsibility in respect of a claim, and in some cases during the period of insurance.

For employers liability the standard limit under a policy is £10M although the statutory minimum is only £5M yet this is not generally available.

For public liability, you select the limit that is appropriate to your business, generally limits start from £1M and are available as £2M, £5M and £10M although additional limits are available.

What is not covered by general liability insurance policies?

Activities that fall outside the business description under the policy.

Professional risks insurance, public liability policies contain a standard exclusion of claims arising from advice, design and specification given for a fee. This risk is picked up under professional indemnity insurance.  

The policy excess: most PL policies will have a third party property damage excess applicable to each and every claim. Commonly £250.

Other exclusions may be applied to your policy such as limitations on the locations you may operate in, the height at which you work or precautions that you must comply with to ensure that you are undertaking your business in a safe manner.

How can I buy liability insurance?

You can apply on-line, where we offer instant on-line quotes for liability insurance for over 1000 trades and occupations or you can call us direct to discuss your requirements with a specialist liability insurance broker.