The cost of a professional indemnity insurance policy depends on several factors. As with other types of insurance, insurers will calculate the price of your professional indemnity insurance (your premium) based on a number of things, including the type of business you run and the level of cover you select.
Whether you can get public liability insurance with a criminal record depends on a number of things, including the details of your criminal convictions. Although some insurers won't provide insurance to anyone with a criminal record, some will provide it in certain circumstances.
The law requires most employers to have at least £5 million of employers' liability insurance, and the fine is a maximum of £2,500 for every day that you don't have this cover. In practice, most insurers will give you £10 million of cover as standard, so you don't usually have to choose a cover level when you're buying your employers' liability insurance.
As a contractor working through your own limited company, it is recommended that you are covered by business insurances whether that be for your own peace of mind or in fact something that is mandatory in your contract.
Both public liability and employers' liability insurance are business covers that can pay out if your business faces a compensation claim for injury. The difference is that public liability insurance covers claims made by a third party (i.e. a member of the public like a client, customer, supplier or passerby), while employers' liability insurance covers injury claims made by an employee.
Public liability insurance claim examples:
1. Claims made against an electrician:
An electrician was engaged for the installation of a heating system in a commercial building. However, the installation was incorrectly done and caused a fire resulting in damages to the property, which amounted to £50,000. The electrician's insurance policy covered the cost of damage.
2. Claims made against a furniture assembler:
A cabinet that the furniture assembler had fitted fell from the wall, and caused injury to another contractor. The furniture assembler was required to pay just £250, as his insurance policy was able to cover the majority of the costs (£25,235).
Professional indemnity insurance is designed to protect you if your client suffers a financial loss as a result of your professional services. It covers the cost of your legal defence and compensation you need to pay to a client for a claim made against you.
Public liability insurance covers your interactions with third parties (by this definition, anyone who isn't your employee).
If your business causes an injury or property damage to a member of the public, public liability insurance will cover you for the resulting legal and compensation costs.
If you've hired at least one employee, employer's liability insurance is a legal requirement for most UK businesses.
And while other types of cover aren't mandatory, you'll most likely want to consider business insurance products such as:
Covering legal costs and expenses in your defence as well as any damages or costs that may be awarded, professional indemnity insurance comes highly recommended for those providing professional services. Many professions need to have professional indemnity insurance as part of their respective industry body's regulatory requirements and so always double check your contractual agreements.
The party that is held liable will depend on the circumstances of each individual case.
If the injury was due to negligence, the party who was negligent will be held liable.
If the injury was caused by a defective product, the "producer" of the product will be held liable. This is generally the manufacturer. In the event that the manufacturer can't be traced, has gone out of business or is located outside the EU, the importer of the product-such as the distributor or supplier-will be held liable.
A party that places its trademark on the product may also be held liable.
For most employers, it is mandatory to have at least £5 million of employers' liability cover, or face a fine of up to £2,500 per day. There are some exceptions to this rule, however: most public organisations and businesses that only employ close family members (as long as they're not incorporated as limited companies) don't necessarily need to have employers' liability insurance.
The price of your employers' liability insurance will vary, depending on the number of employees you have, the industry you operate in, as well as the type and level of risk your business faces most often.
To give you a rough idea, here are a few examples of the approximate costs you can expect to pay:
To obtain a more accurate estimate, your best option would be to run an online quote with the insurance provider you're looking to purchase from.
Public liability insurance isn't compulsory by law, but many businesses decide that they need it to protect themselves from crippling compensation costs, and also to satisfy the requirements of potential clients.
As it can protect you if you're sued by a member of the public, this insurance is particularly important if you interact with customers, suppliers or passersby in the course of your work.
Professional indemnity insurance covers risks in association with your professional services. It protects your business from legal and compensation costs that arise should a client make a claim against you, under circumstances such as:
You can purchase business insurance before you obtain your trade licence. However, if you start trading without having the required licence, your policy may be deemed invalid.
Covering compensation payments and legal costs if a member of the public sues your business because they've been injured or their property has been damaged, public indemnity insurance is highly recommended for all businesses. Many professions need to have p insurance as part of their respective industry body's regulatory requirements and so always double check your contractual agreements.