AN INTRODUCTION TO LIABILITY
To put it simply, liability… isn’t very simple. There are all sorts of terms used for different liability covers and the definitions can be quite specific. We understand if you aren’t an expert on the difference between public liability and products liability, but we’re here to help!
Liability, on its own, is the state of being legally responsible for something. This can be a situation, a product or a person. Typically, liability cover can be broken down into three main covers:
Public Liability
This covers damage or injury to a third party (or their property) for which you can be held legally liable, whether this is a customer, supplier or just a passer-by. It can also cover injury or damage incurred to/on property belonging to a third party.
If a visitor to your retail premises trips over boxes left on the floor, injuring themselves, they may be able to claim against you. Public Liability insurance provides you with cover for this.
Product Liability
Product Liability, on the other hand, covers damage or injury to a third party by a product that you’ve manufactured, sold or supplied. This may also apply if you didn’t manufacture the product but it bears your business’ name, or if you have carried out repairs/refurbishment of the product.
You might be considered liable if customer at your café falls ill from food poisoning after eating a meal you’ve prepared and served, and this would be covered by your Product Liability insurance.
Employer’s Liability
This is a legal requirement if you employ one or more people and provides cover for your legal liability should any employee be injured or ill as a result of working for your business. This is required even if you only have temporary or casual staff, and you will need to provide your ERN or PAYE number to your insurer to make sure any future claims can be paid from your policy. Read more about that here.
Find out if you need employer’s liability for your contractors here.
If an employee working outside, on a ladder which has not been properly maintained, falls and suffers injuries, Employer’s Liability insurance covers this.
Other useful terms and why insurers might use them
Limit of Indemnity (LOI) – The maximum amount insurers will pay.
‘In the aggregate’ vs ‘any one claim’ – The limit of indemnity can apply as a total limit of all claims (aggregate) or for any one claim within a defined period.
Territorial Limit – This is the area within which you are insured/allowed to work.
Jurisdiction – The area in which insurers can defend a claim.
Per Capita – Some liability policies are rated on how many people you employ.
Wages and Turnover basis – As you grow, Public Liability premiums will be calculated on turnover, and Employers Liability premiums calculated on wages.
Work Away – This specifies whether you’re covered away from your named premises. Read more on work away cover here.
Use of Heat – This will specify whether use of heat tools is included in your cover. Read more on use of heat and insurance here.
Depth/Height Limits – If you dig down or climb up, your insurer will only cover you to certain depths/heights specified in your policy wording.