How does public and employers liability insurance work?

Public liability insurance offers financial protection against claims from members of the public for bodily injury or property damage, providing that the policyholder is legally liable.

Employer’s liability provides financial protection against claims from employees for bodily injury, providing the employer is legally liable.

There are two ways that Insurers calculate the premium for these policies. For smaller businesses the insurers calculate the premium based on the number of employees, this is called “per capita” rating.

For larger companies the premiums tend to be rated on the estimated turnover and wage roll. Estimates are provided at the outset of the insurance and insurers charge a deposit premium based on these figures. At the end of the period of insurance the insurers will ask for a declaration of wages and turnover and then adjust the premium accordingly.

Other factors in determining the premium will be the public liability indemnity limit. The minimum indemnity limit is normally £1,000,000. It is commonplace for indemnity limits to be £2,000,000 or £5,000,000. Public liability for scaffolders and other higher risk occupations can require indemnity limits of £10.000,000, especially if work is being carried out for local authorities.

There are also various specialist insurance schemes for industry sectors. For example there are specialist insurance policies for the cleaning industry and for the security sector.

For further advice on liability insurance, please contact Tony Gibbs on 01189 165 485 or complete one of our enquiry forms.