Starting your own business can be a stressful and emotionally taxing experience. For many self-employed businessmen and entrepreneurs, worrying about things like an insurance can take a back seat to trying to make the business viable. However, without the proper safety net, a single accident can ruin a promising business and threaten your financial security for years to come. Given that no amount of caution and care can prepare you for all situations, having an insurance policy is important part of safeguarding your business. While you may be okay with the prospect of a new business failing, the last you thing you want to endure is starting a successful business that is driven to bankruptcy by forces out of your control. How Public Liability Insurance Protects You
Public liability insurance is designed to cover the cost of a claim made by a third party or a member of the public. For instance, if a wet floor was not properly marked and resulted in a customer falling, you could be financially liable for their medical bills as well as damage to any property in their possession. Generally speaking, public liability insurance covers the following:
• The cost of any medical bills, ambulance rides, or NHS claims resulting from the accident.
• Any legal fees and representation, as well as any costs associated with fighting the claim.
• Miscellaneous expenses derived from the lawsuit.
As a result of the rising cost of medical care as well as legal representation, a single incident can cripple a business' finances. For example, for most businesses insurance companies will offer a policy with a minimum of £5 million in coverage. The indemnity amount can be increased to £10 or even £15 million depending on your level of need.
What Public Liability Does Not Cover
Public liability insurance should not be confused with Employers' Liability Insurance. Employers' Liability is designed to protect you against claims made by employees as opposed to customers or members of the public. Typically you will need both types of coverage unless you are self-employed. As such, most insurance companies will often bundle the packages together for greater discounts.
Another thing to keep in mind are exclusions built into the policy. For instance, cheaper policies may seem more attractive due to the price, but they often fail to cover areas that are of the most risk to your business. Conversely, you may run a business that does not run the same level of risk as your peers. In this case, a more flexible policy may garner a better premium.
It is important to talk to a financial adviser and go over what risks are common to your business type and how they apply to you. It is also a good idea to make sure your insurer is registered with the Association of British Insurers, particularly with internet insurance companies that may seem less than reputable at first glance.
Ways to Lower Your Public Liability Premium
In addition to flexible coverage, there are other ways to lessen the burden of a monthly premium, especially if finances are tight. Raising the amount of excess you pay is a good way to decrease your risk factor. Installing safety measures or showing good claims history can often result in bonuses that lower your premium.
However, it is important not to sacrifice coverage itself, as inadequate protection can lead to a lawsuit that ruins your business. While finances are often tight with any new business, having the proper insurance will ensure your business does not fail for reasons out of your control, and will give you the peace of mind to concentrate on the things that truly affect its viability.
