HM Insights

Insurance for small businesses – are you covered?

For many people, setting up their own business is something that they have dreamed of for years. However, there are many considerations to be taken into account when doing so and something that can often be overlooked is what insurance cover is required.

Unfortunately, we live in a very litigious society where claims for personal injury are rife. Small businesses, in particular, can be affected when a claim is made against them. The outcome can too often mean that a business is no longer able to operate but the potential cost and stress of a claim can be alleviated by having the correct insurance in place for your business.

Two of the most important types of insurance for small businesses are employer liability insurance and public liability insurance.


Why do I need Employer Liability Insurance?

Anyone running a business is responsible for the health and safety of their employees whilst at work. Employer Liability insurance protects businesses from the cost of compensation claims arising from employee injury sustained during the course of their employment with the business.

By law, most businesses with one or more employees are required to have employer liability with cover of up to £5,000,000, and there are very few exceptions. Failure to have this type of insurance can result in a fine of up to £2500 per day. Not only can the business be fined but it is then also responsible for paying the compensation claim. Given the nature of many accidents at work, the claims can be worth tens of thousands of pounds and sometimes more, and that is before taking into account any solicitors’ fees.

Public Liability Insurance

Public Liability insurance is generally voluntary. However, a prudent business owner should also consider having this type of insurance in place. It is particularly important if your business involves customers or other members of the public coming onto your premises. This insurance covers compensation payments and legal costs if a member of the public sues your business because they have been injured or their property has been damaged on your premises.

For example, if a customer enters your premises and trips on a loose bit of carpet and injures themselves, they may make a claim for compensation against your business. Again, failure to have this type of insurance would mean that the business would be obliged to meet any compensation claims and legal costs.

Final thoughts

Owners of small businesses have many different financial constraints to deal with. Insurance costs can be high but compared to the potential costs that your business could face when a claim is made, it is worth the peace of mind knowing that your business is properly insured.

Our team is experienced in acting for both pursuers and defenders in cases relating to both employer liability and public liability. Please get in touch to find out more.


Useful Links


accident at work claims

serious injury claims