25th June 2010
In todays legal and fiscal environment, a business will find that it cannot be too careful about the level of risk it covers with it's employers and public liability insurance, because a major claim, if uncovered by insurance, could prove unacceptably expensive. The cost of insurance itself has to be considered, of course, but that really depends on what your business is and what the risk factor associated with it is. Of course a construction business will have more difficulties with insurance, and will have to pay more for insurance than, for example, a pizzeria.
The first thing that an insurance policy should cover is, of course, risks to your employees themselves. Remember that it is easy to be injured in some accident, or even slipping on a wet floor, even in an area you might think is actually safe.
You need to be covered by employers and public liability insurance because anything in the business environment can make you liable, remember, and sometimes the liability extends to more than the cost of treating the injury itself, and legal costs associated with a law suit. If a suit extends into this gray area you might find yourself paying out hundreds of thousands of dollars – quite enough to seriously put a dent into your cash reserves. This is what is termed an unacceptable risk.
And that's if you're a large business – things get even more stick if you are not a large business. Say you have something as small as a grocery store. Perhaps you do not think that you need employers and public liability insurance. Someone slips on the ice on the sidewalk in front of your store and hurts their arm. Well, a court could very well find you liable, and that places you in a risky situation, financially speaking.
The court may award liabilities for negligence, as well as having you pay legal costs, not to mention all the medical fees as well – this can all add up to a good sized sum, and for a small business, a sum like that can upset the delicate balance between cost and expense, and put the business into debt or even bankruptcy. Well, if you are covered by employers and public liability insurance, you need not worry about such a disastrous scenario ever happening – your insurance cover will handle everything.
However, it is crucial to choose your company wisely. You must not choose fly by night operators who might not respond quickly enough in case of a real disaster. Remember, your insurance company must be willing to cover costs as they occur, at least in part, not just after the fact.
After the fact is just not enough, because if the insurance company delays long enough before paying, the expenses could still put your business under by the time they do pay up. You need to scout carefully when searching for employers and public liability insurance and look at different insurance companies – see what the attitude of the staff is like, often it reflects the attitude of the company.
Ask to see their statistics of actual coverage for the last past year, ask for incidents where they actually paid, then ask for phone numbers that would allow you to check those statistics. Check and recheck whether an insurance company is truly willing to back you up, because when you find one that is, you can rest easy.