If you own a small business, you'll understand the importance of protecting your members of staff; if an employee suffers an injury or becomes ill as a result of problems in the workplace, they are perfectly entitled to sue their employer for compensation. Fortunately, any such claims are covered by employers liability insurance, which is a legal requirement for most businesses and organisations.
How do you know whether you need employers' liability insurance? Well, if you have any members of staff at all, then in most cases it’s compulsory. If you opt not to take out this form of business insurance, then you not only risk receiving a fine, but you could put your organisation's finances in jeopardy should an accident to an employee occur, particularly if they believe you are responsible.
Indeed, most of us have seen the adverts on TV promising easy access to no-win-no-fee legal services, and it appears that large numbers of employees have taken this on board: research from consulting firm Greenlight published in July 2010 showed that Internet searches for legal services increased by 25 per cent in May compared to February, which represents a rise from 1.2 million to 1.5 million.
Over 320,000 of these related to searches for negligence keywords such as 'no win no fee' and 'accident claims', which indicates that more employees than ever before are familiarising themselves with how to issue compensation claims. So, if you have members of staff, ensure that you take out employers' liability insurance from an authorised insurer. Not sure where to find one? Simply consult the Financial Services Authority, which can provide you with a comprehensive list.
According to the British Safety Council, the most common types of workplace injury are slips, trips and falls, falling from height, being struck by a moving object and lifting and carrying. Even if your business is office-based, all it takes is one stray cable and a subsequent trip by an employee and you could end up with a claim being submitted against you.
Are there any other instances whereby your employers' liability insurance can be triggered? Yes - even if an employee is a voluntary helper or is self-employed but working under your supervision, they will still be able to submit a claim.
There are two other types of policy that are worth considering, and the first is professional indemnity insurance, also known as PI insurance. This may be necessary if you provide work to a client and they have a problem with its quality. If a compensation claim is filed, you may have to pay to correct the mistake you've made in addition to paying legal costs - both of which PI insurance can help cover.
How do you decide whether you need PI insurance? Well, if you give professional advice to your clients on a regular basis, handle data belonging to them or their business or are responsible for their intellectual property, then arranging a policy may be sensible. In addition, PI insurance may be a good idea if you or your company provides a professional service that can be challenged. Even if you're confident about the quality of your work, you always run the risk of not meeting your client's expectations, which in turn could jeopardise your business's finances. Even if you lose your case when a claim is brought against you or your company, the policy can still provide cover for any resultant damages.
Put simply, PI insurance covers you in the case that your client believes you have been negligent. Unfortunately, what constitutes negligence isn't black and white, and this topic is often debated by lawyers. So, essentially, PI insurance can offer your business protection against statements that you might not have realised were made by your staff, but which were subsequently perceived as negligent by the client. What's more, it can also protect your business against claims should you give (despite your best intentions) incorrect advice.
A further type of business policy worth considering is public liability insurance which, like employers' liability insurance, is related to accidents. By taking out this form of policy, you'll be protecting your organisation from claims against accidents that affect a member of the public, a client or a contractor. If you're unsure whether your business needs it, consider how easy it is for an accident to occur. Imagine you're presenting to your client in their office and you knock a hot drink over their computer. Should this occur, they're entitled to issue a claim to recover the cost of any damages and repair work. So, even if you don't invite clients or visitors into your office, you may still be vulnerable to compensation claims.
It has become more likely for companies and organisations to insist on their suppliers taking out public liability insurance, which can also help meet the costs of treating a personal injury. For example, the NHS is entitled to claim against a business for the cost of any hospital treatment, and this includes paramedic attention and subsequent transportation in an ambulance.
Once the policy is arranged, however, it can be put to the back of your mind. What's more, you can rest assured that in the event of an accident occurring, your company will be protected financially.