We are all looking forward to the day when businesses, restaurants, pubs and factories (not necessarily in that order!) can open the doors to their staff and the general public. Whether you are in charge of a building site, a fleet of drivers or a chain of restaurants you will be facing unprecedented demands and pressures to, among other things, return to “business as normal”. What that is remains to be seen. But some constants remain - risk, liability and insurance.
In the rush to “get back to normal” don’t forget to plan ahead and guard against risk. Machinery and equipment may have been dormant for weeks and therefore may pose a risk to staff. What testing and assessments will need to be done before it can safely be made operational? What about sites and business premises, could they have been altered without the usual day to day upkeep and pose health and safety risks to staff? Will staff remember their health and safely protocols and procedures? What training will they need?
As you look ahead to strategically exit hibernation of your business, when the time comes, do you have the right insurance in place to go forward?
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 insurance with cover for at least £5 million with an authorised insurer. There are very few exceptions. Failure to have this type of insurance can result in a fine of up to £2500 per day. You can also be fined £1,000 if you do not display your certificate or refuse to make it available 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 or being exposed to risk.
Public Liability insurance can cover compensation claims for injury or property damage to third parties such as customers, suppliers or any other member of the public who comes into contact with your business.
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.
If a claim is made against my business do I have to appoint the legal advisers my insurer wants me to?
Some policies will allow you to nominate your own solicitor from the start, providing that the chosen solicitor accepts the insurers terms and conditions. Other policies will dictate that you accept a solicitor from their panel. However, there are only a few circumstances when an insurer can refuse a policyholder's right to choose their own solicitor. For example Freedom of Choice does not apply in situations when the insurance cover is limited to an accident or breakdown of a vehicle and to risks which stem from the use of a vehicle. However, even then, in certain circumstances the insurer may be prepared to accommodate the policyholder's request and agree otherwise.
Planning ahead for the day when staff are able to return and businesses that have been dormant can emerge from hibernation, even if on a phased basis, will help business be ready and raring to go in a way that is both productive and safe. The alternative could see a significant increase in accidents and injuries at work so we caution everyone to use their time wisely and plan ahead.