Some bed and breakfast owners might say that they have indeed considered public liability insurance, but have dismissed the need for it because:

• there is no legal requirement for establishments offering bed and breakfast accommodation to have such cover; and
• the standard buildings insurance which covers the property already includes an element of protection against such claims.

With respect to these arguments, it is true that there is no legal imperative. Nevertheless, the settlement of certain public liability claims might prove very expensive indeed and one that an ordinary bed and breakfast business might well not survive financially. In fact, without adequate insurance to indemnify the owner, it might even be necessary to sell the property in order to meet such claims.

It is also true that certain categories of commercial buildings insurance also contain provisions for meeting the owner’s public liabilities. However, this is not necessarily true of all policies or all types of claim. Bed and breakfast public liability insurance, therefore, remains one way of ensuring that such risks are covered.

Types of claim

When it comes to public liability insurance, claims might be prompted by a surprising and extremely diverse range of situations. They might be prompted by the seemingly trivial, yet also include such hefty awards in damages or compensation that the entire bed and breakfast business hangs in the balance. Consider just a handful of examples:

• You are serving breakfast to a couple of guests planning to attend a relative’s wedding. You trip on the carpet and the breakfast slips from the plate into the lap of one of the guests. You are liable for paying an expensive, emergency dry-cleaning bill;
• Another guest goes outside to check his car, only to find that the wrought-iron gate you’d failed to secure has swung open and caused a huge dent in the wing of the vehicle. You have an even more expensive car repair bill to settle;
• During the night, a severe storm uprooted a tree, which fell across the road, onto a passing car. The driver and his passenger were both injured and hold you liable.

In each of these – not so far-fetched scenarios – bed and breakfast public liability insurance may typically come to your rescue by compensating you for the financial claims made, subject to you making a successful claim of course.

What does employers’ liability insurance do?

This policy typically provides financial protection in the event that an employee makes a claim against you for an injury or illness sustained while going about their day to day business or on your premises.

If you run a business, you may think that nothing will ever go wrong – for example, you will never be sued or accused of negligence. However, some things are beyond our control and things can, and do, go wrong. And in today’s society, where suing people is the norm, your livelihood could be at risk if an employee decides to make a claim against you for something unexpected.

Professional indemnity insurance can help your business to overcome unexpected hurdles and minimise any financial loss – as well as the undoubted stress you will personally face – in the event of a claim against it.

If you were faced with a business claim against you or your company, [KEYWORD] could step in and provide a number of benefits, such as assistance with legal costs and claims for damages. This would keep your business running where it otherwise may fail.

So, where do you go if you want to buy employers’ liability insurance cover? Specialist providers of liability products may be an option – they will often have unlimited expertise in the sector, as well as a choice of policies, enabling them to provide cover that is suitable for your needs.

Do note that as with all things financial and legal, policy terms and conditions do vary among the different providers. Check the small print to confirm the amount of employers’ liability cover you have; any excesses; and how long a policy must be in force for before you can claim.

Employers’ liability insurance is not just a legal requirement – it provides a financial safety net should your business be the subject of a claim against it, so never under estimate its importance.

When you are deciding what kind of cover to choose, consider the risks that you want protection from. Most insurers will typically cover damage caused by natural disasters, as they are incidents over which you have no control. For example, floods, storms, and earthquakes are included in that category. Strikes and riots are also standard insured risks from most providers. Other risks which are often included are theft and fire. Whilst the insured person is not likely to be responsible for these things, there are steps you can take to mitigate the risks.

For example, a prudent business owner will take steps to prevent fire in his premises, and may even be obliged by law to do so. Likewise, most business owners accept the need and desirability to take some security measures to prevent break-ins and theft

Your business equipment is unlikely to be covered by any damage or breakdown caused by lack of proper maintenance, or by wear and tear. Likewise, any concerns you have about defects in the equipment itself should be taken up with the manufacturer.

When you are getting quotes it can be useful to draw up an inventory of the equipment you have. This task can focus your mind to what your equipment is worth, and make you realise how much it would cost to replace without insurance.

If you lease your business equipment, it may be your responsibility to insure it when it is in your possession. Check the leasing agreement carefully. Otherwise you may find yourself liable to replace equipment that isn’t even yours.

Business equipment insurance relates to replacement or repair of the equipment itself. But what about the damage caused to your business while the equipment was unavailable or out of action? Some insurers offer business interruption insurance, which covers exactly this scenario and pays out for some of the profits lost due to an insured risk. It’s always worth asking whether you can get this cover, and whether the provider will offer a discount if they are covering your equipment too.

• Public liability insurance – this is a core element of most business insurance, yet is also one that can be easily overlooked by those working from home. Wherever your office is situated, you can be held liable for any loss or damage to property or any injuries sustained by customers, clients or members of the public visiting your office. The liability extends to any business activity in which you are involved outside of the office;
• Contents – computers, printers, and fax-machines are all found in most offices and represent a substantial investment on the part of the business. Unfortunately, there are also at risk of fires, flooding, theft and damage. Adequate insurance against such loss or damage is sensible, therefore, and an “all risks” policy will also the cover to more portable equipment, such as laptops;
• Employers’ liability – your office insurance package will typically need to include employers’ liability (of at least £5 million) to protect you against claims from staff for injuries or illnesses sustained as a result of their work for you. Accidents in the office are surprisingly commonplace and the cover is a legal requirement if you employ people. You could be fined up if you don’t have it;
• Business interruption – there might be a temptation to take the use of your office (whether at home or elsewhere) somewhat for granted. However, you have only to think of the costly disruption to your business if the office is subject to something like a fire or flood. Business interruption cover as part of your office insurance may protect you against the financial losses that result from such perils.

In principle, working from home is not so different from the needs of a business operated from any other location. The insurance needs can be many and varied.

• Buildings and contents – the structural fabric of your home is probably already covered by your home insurance. When it comes to the contents, however, insurers will need to distinguish home contents from business contents in order to cover both categories against the risks of accidental damage, loss and theft;
• Office equipment – if your home-based business relies on computer equipment, you might want to consider cover specifically designed to protect you against computer breakdown. If you take out “all risks” cover on your business equipment, then this will also extend cover to any laptops or other portable equipment you might need to use away from home;
• Public liability – this is a central element of any business insurance and you might find that your current home insurance provides some measure of cover, but typically for private use, not commercial. It would be important to make sure, since this component of your work from home insurance will indemnify you against claims from customers, clients or even members of the public who visit your home in any way connected with your business. So typically you may need to have public liability insurance for your business. For example, a caller at your door simply needs to trip up the step, suffer an injury, hold you liable and sue you for expensive compensation. Speak to your home insurer to see where you stand regarding public liability cover.

When you take into account that in order to run your dental practice you will need not only the equipment to be able to take care of the clients teeth you will also have to have such as computers to keep a track of your clients and these would all add up to quite a sum of money if they were damaged or destroyed, say as the result of fire. While the insurance policy for your dental practice would pay out to provide you with money towards being able to replace any items it would also come in very useful for many more situations where otherwise you would have to pay out yourself.

You would of course have to take into account that you would have to pay excess towards a claim should you have to make one. However paying out £200 or so towards the claim is nothing compared to what you could have to find if you do not take out insurance, so you might want to consider this.

Running any business requires you to order stock and supplies and the dental practice is no exception. If you were to place a substantial order and that order never arrived then you would lose out without having insurance to fall back onto and provide you with the money. You might for example risk trying a supplier that you have not done business with before to save money if they happen to be the cheapest supplier.

However you are not going to save much if they go bankrupt. With a business insurance policy you would be able to claim on your policy.

You would also have the backing of dental surgery insurance to fall back onto by way of liability insurance for your staff members. If one of your staff should get injured on your site of business they would be entitled to make a claim for compensation and this could come from your insurance policy. When you take into account the cost of solicitor and medical fees this could be a substantial sum of money which otherwise you as the business owner would have to find out of your own pocket.

As well as providing a service in return for payment from your customers, as a tradesman you also have a responsibility for carrying out that work without injury or damage to your customer. In other words, you have a potential liability for mistakes and errors made during the course of your work. You might be an electrician, for example, yet through a simple mistake complete a re-wiring project that sparks a fire causing damage to your customer’s property. The customer then has a valid claim against you and can sue for damages in compensation for the loss he or she has suffered.

Unless you have tradesman insurance to cover such a claim, of course, any compensation has to be found from your own pocket – and, depending on the size of any claim made, you and your business could be faced with potential ruin.

The error might not even be your immediate or direct mistake. You employ a trainee, for example, and ask him to sweep a chimney. In the course of his work, he dislodges a heavy ceramic cowl on top of the chimney, which comes crashing down through the conservatory of a neighbouring property. Your business is held liable and you are faced with the huge bill of making good the damage. Tradesman insurance is designed to cover you against such claims from third parties through public liability insurance.

That reference to someone in your employ should further prompt another vital consideration of the tradesman insurance package – your liability as an employer for any injury, or even death, of an employee engaged in work on your behalf or an illness which he or she contracts as a result of that work. Indeed, if your business employs any staff – whether they are trainees, apprentices or fully-skilled – you will be typically required by law to hold employers’ liability insurance up to a minimum of £5 million. If you fail to arrange such insurance, you can be fined up to £2,500 a day for every day that it is lacking.

Tradesman insurance is also likely to include insurance to cover the loss, theft or damage to the tools of your trade, including any motor vehicles needed to get you from job to job. A minimum of third party cover is, of course, a legal requirement for any vehicle used and driven in the course of your business.

Just a moment’s thought, however, will prompt the rather depressing realisation that there is a lot to insure. Not only is there all the stock, equipment and fittings in the shop, there is a whole range of potential liabilities against which customers, members of the public and employees could claim. In the event of the worst happening and your needing to make a claim, you are also likely to want some reassurance that there is no financial loss through the interruption in running the business itself.

Fortunately, many insurers offer a comprehensive shop insurance package, ensuring that most, if not all, of your insurance requirements can be kept together under the one policy. Policies differ, of course, so it could prove worthwhile seeking the advice of an independent insurance adviser to identify the right package for your own business at the most competitive rate.

Although the required cover will naturally depend on the type of shop you are running, its size, its location and whether you employ people other than immediate members of the family, as a general rule, most shop insurance packages will include the following headings:

Public liability – to cover you against claims from customers or members of the public who suffer loss or damage to their property or personal injury whilst shopping with you if you are at fault;

Product liability – to indemnify you against claims that goods your shop has provided have caused the customer some loss or damage;

Contents insurance – to insure your stock and equipment – and of course cash – against accidental damage, theft, fire and other risks;

Employers’ liability – cover that is essential if you employ staff and necessary to cover against injury to staff while working in your shop or for illnesses they might have contracted as a result of working there;

Business interruption – to ensure that you are covered for any financial losses following the shop’s closure in order to deal with accidents and emergencies.

Buildings insurance – in addition, many varieties of shop insurance will also cover the building fabric of the shop premises themselves. Clearly, this is especially important if you own the premises, but even if they are rented from a landlord it is important to establish that sufficient cover is in place. It is also worth noting that even in the case of a tenanted shop, the tenant often remains responsible for the shop-front itself.

One of the keys to understanding the independent contractor’s role is with reference to the contract under which he or she is providing goods or services to the client or customer. The legally enforceable contract imposes certain legal responsibilities and obligations on the contractor. If the contractor makes mistakes or errors, acting in any way that can be shown to be negligent, the terms of the contract are likely to have been breached and the contractor then has a financial responsibility for compensating the customer for those mistakes or errors.

Fortunately, claims against contractors are relatively rare, but the downside is that when a customer’s claim for damages is brought, it can be for a considerable sum in compensation. It is the availability of the customer’s recourse in law to seek damages for any financial losses your work on their behalf might have cost them that makes contractors’ insurance such a valuable safeguard for the independent contractor.

But it is not just the protection against the relatively rare event of a claim that makes such insurance attractive. Most contractors will find that potential clients and customers will require them to be covered by contractors’ insurance – the most common form of which will be professional indemnity insurance – as a condition of any contract being awarded. Contractors’ insurance in itself, therefore, will be taken as a measure of the contractor’s standing, reliability and professionalism.

Although claims may be made against you as a contractor by customers who allege that your mistake or negligence has caused them financial loss, there may also be claims based on little more than a general dissatisfaction with the service or goods you have supplied. Whilst the latter are therefore unlikely to lead to any liability on your part, your business will nevertheless be faced with the considerable legal costs, time and effort (probably to the detriment of other contracts that could have been won) in defending the claim. Contractors’ insurance will help to ensure that your business does not incur the costs of such an exercise.

Many people are in business selling their expert skills or knowledge. These include architects, surveyors, solicitors, accountants, financial advisers, journalists, IT consultants, engineers and designers, to name but a few. Most of these will have considered the benefits and safeguards of protecting their business against customers’ claims of professional negligence or error with consultants’ insurance – or, as it is also commonly known, professional indemnity insurance. Indeed, many of the professional bodies that grant authorisation, registration or regulation will require their members to hold appropriate professional indemnity insurance before they can offer their services for sale. In addition, however, other consultants – such as public relations and advertising agencies, management consultants and designers, will also seek the benefits of consultants’ insurance and find that it inspires in their clients and customers a greater confidence in the professionalism of the consultants concerned.

Consultants’ insurance provides financial protection against claims that the services provided by the consultant have been made negligently or mistakenly and the customer has suffered loss or damage as a result.

The consultant’s business may be held liable if the customer or client can demonstrate a financial loss as a result of the consultancy services provided. This may be a claim that the work was negligent, or contained errors or omissions. It might also claim that the services provided infringed a third party’s intellectual property rights, or breached confidentiality or business confidences, and the customer has suffered a financial loss as a result. A further area of risk to the consultant – and one that even government agencies have shown themselves prone to – is the loss of data or documents. If the consultant’s customer suffers a financial loss as a result of such losses, then he or she is entitled to damages in compensation.

The appropriate level of consultants’ insurance will, of course, depend on the nature and size of the consultancy business. A specialist insurance adviser will be well placed to offer guidance and assistance in identifying the most suitable level and amount of consultants’ insurance for your particular business.