A simple definition of liability insurance is a type of coverage that provides a policyholder protection from claims arising from a third party that have arisen from damage to a person's health or personal property. As this is the most common type of insurance, it should come as no surprise that there are a fair number of variants and types of plans that can suit a variety of purposes.
Homeowners will choose such coverage to be protected should anyone be injured while on their property. This can include workmen, visitors, tenants or anyone that is considered a third party and not the legal owner.
Although it is not required by law in the UK, most businesses take out public liability insurance. This type of insurance covers the company financially should someone outside of the business suffer and injury or incur any damages as a result of the business, such as an employee spilling coffee over a client's laptop or a customer tripping on haphazard floor boards.
Another type of liability insurance for businesses is employers' liability insurance. Unlike public liability insurance, employers' liability insurance is a legal requirement in the UK. UK businesses must have an employers' liability insurance policy that covers them for at least £5 million. This type of insurance overs the compensation costs that the company will incur should an employee becomes unwell or injured as a result of their job.
However, many businesses find it cheaper and easier to take out a business insurance package which couples public liability insurance with employers' liability insurance. In addition, if you look online you will find that a number of top business insurance providers also include optional extras in their insurance packages, such as professional indemnity insurance.
In summary, some of the most common forms of liability protection are:
- Liability for homeowners.
- Public Liability Insurance
- Employer's liability against personal damages.
Things to Consider when Choosing a Policy
One main factor that needs to be determined is the level of financial protection that a specific policy will offer. Unsurprisingly, this level should directly depend on the chances of an injury unexpectedly occurring. For example, a workplace needs to have a more robust policy, as injuries may be more likely to take place. On the contrary, homeowners may opt for a package that is less encompassing, for accidents are less likely to occur.
A second consideration are the rates themselves. This is a rather malleable area, for the broker will need to take into account the value of the company and the likelihood that a claim will be filed. Although many owners tend to balk at high quotes, the protection that they offer is well worth the financial outlay. Nevertheless, in order to make sure that you are getting the best deal for your liability insurance, get quotes from a number of different insurance companies.
A third variable is what the policies will actually cover. Umbrella policies will offer the most comprehensive protection and also safeguard against fire or theft that may result in an injury. Most of these plans tend to be modular in nature. That is, other amenities can be added on as necessary. A good example of this need can be if a company opens up a new location at a busy intersection and will be transporting materials in and out of their shop the entire day. Public liability plans may need to be included in such a case.
So, some of the main concerns when choosing the correct package are:
- The level of financial protection provided against a claim.
- The affordability of the rates.
- The comprehensive nature of the policy and if all variables are accounted for.