What does liability insurance cover?

Liability insurance includes three cover types:

• Public Liability Insurance

• Product Liability Insurance

• Employers’ Liability Insurance

Public Liability Insurance

A tradesperson who regularly comes into contact with customers will have a legal responsibility to ensure the safety of any third parties whilst at the location in a working capacity. If for example, you are a heating engineer or a plumber that carries out home visits, there will always be a professional duty to observe safe working practices. Not doing so could potentially lead to negligence and a compensation claim. For instance, a customer suffering injury following an onsite visit which left something exposed. Public liability insurance acts as the safety net, covering the costs associated with legal fees and compensation claims even if it is found later that there is no fault that can be attributed to the work itself. It's worth bearing in mind that you may require an official defence of the business being made in court which always involves a cost outlay.

Product Liability Insurance

Product Liability can cover any business which promotes the sale of material products to their customers. It’s often critical when a customer claims the product hasn’t met their specifications or a design defect leads to injury. It may be that a flooring solution for example loses it's ground which causes substantial damage to the premises.

It also covers situations where poor safety instructions lead to a client suffering injury when installing or using the product, such as a garden barbeque. In summary, this insurance is relevant for

• Manufacturing or production defects.

• Design faults.

• Not providing sufficient warning to specific handling.

Employers’ Liability Insurance

The UK government requires all business that has at least one employee to have this insurance. It's fundamental purpose is to financially protect staff when an injury or property damage is caused at work. For example, a staff member trips over a work object on the floor or another employee is harmed after being subject to inadequate health and safety precautions. The business could face legal action and employers’ liability insurance will provide funding to navigate through any impending court case as well as dealing with potential compensation claims.