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Your potential exposure to big claims
Business liabilities for the risk of damage or injury to others can lead to some very large claims. Every business has an exposure and each will try to minimise their exposure in different ways. Well managed businesses that demonstrate a commitment to a high level of health and safety and with good record keeping can find favourable terms from insurers.
Pricing will vary with the size of business, the work undertaken as well as the location and nature of their customers.
Employers’ liability
EL insurance is compulsory for any business with employees and will usually be set up with a £10m limit of indemnity.
ELTO – Employers Liability Tracking Office
The difficulty in finding details of employers liability policies from many years ago for claims such as asbestosis has led to a new database of all policies including EL cover.
ELTO, the Employers Liability Tracing Office, needs businesses to supply Employer Reference Numbers (ERNs), otherwise known as PAYE reference numbers, to populate its database.
Click here for a form to supply your ERN
What is an employee?
A person with a contract of employment directly employed and paid through the PAYE system is obviously an employee. Directors of Limited Liability companies are also classed as employees and must have EL cover except in very limited circumstances.
Labour Only Sub Contractors are also considered by insurers to be employees and are included within the definition under EL policies.
Many others are also included such as volunteers and work experience people. The full definition will be included within the policy wording.
Public Liability
Every business has a duty of care to others and the duty for work being carried out is insured under a Public Liability section. Cover will usually be up to the limit of indemnity for each and every claim subject to the claim being higher than the excess. Most policies will apply excesses for damage to property only and not injury but they may be higher for use of heat or work in hazardous location.
Products liability
Many businesses manufacture, maintain, alter, supply or distribute products and should therefore have Products Liability insurance. It is usually included together with Public Liability cover but is limited to the aggregate of the limit of indemnity over the period of insurance.
