Liability Insurance

UK Liability Insurance – In Plain Language

If you are looking for liability insurance for any kind of event such as a wedding, an exhibition, disco, birthday party, horse show, music festival, street party, dog show, fun run, car show, banquet, camera club, bar mitzvah, fashion show or in fact just about any single or multi day event then you will almost certainly require event insurance. Here are the links to our events insurance pages :
Wedding Insurance
Exhibition & Market Stall Insurance
Any Other Event Insurance

Being an employer or small business owner, you have a legal responsibility towards your employees, customers and the general public. You could be held legally liable and risk being sued if an employee or a member of the public suffers an injury because of your breach of duty or negligence. If their claim for personal injury compensation is successful, you might also receive a bill from the NHS for refund of hospital treatment costs (including ambulance costs should it be necessary).

In a basic form, liability insurance is designed to pay any compensation and legal costs that could happen if a worker is discovered to be at fault. If you employ staff it is very likely that you will be required to take out employers’ liability compulsory insurance (ELCI).

ELCI forces any employer carrying out business in the UK to insure their liability to their employees for harm or disease suffered whilst in the course of their employment in the UK. Liability insurance offers greater security to firms against costs which might result in financial problems, and to staff members that resources will be on hand as compensation even if companies have become insolvent.

How liability insurance works

The price of an insurance policy – known as the premium – is normally calculated using a “book rating”. A book rating is worked out by starting with a base rate, which reflects the insurer’s overheads and signals their appetite for your particular type of business – if they want your type of business, the premium will be cheaper than if they don’t.

The premium is then modified to reflect the insurer’s estimation of the level of risk attached to a particular profession or industry area.

The price will be affected by factors such as any previous claims, the size of the perceived risk and your approach to risk management.

The fewer claims that you have made and the safer your working environment, the cheaper your premium should be.

Premiums also include calculations from other similar businesses by amalgamating both good and bad – small businesses with a good record may be damaged by this. Your own approach to risk management plus your safety record can lessen the effect of this.

For employers’ liability, the risk to the insurance company is calculated whilst taking into account the number of employees and the size of the company wages bill. In addition, there are further factors that influence how risk is assessed.

For product and public liability the exposure risk is calculated on the turnover of your business and factors including whether you carry out your business away from your normal place of work.