Is Public Liability Insurance Mandatory?

[SueEllen]

I'm not entirely sure that's right - the exemption for family businesses doesn't apply to incorporated businesses; if you pay a salary to your spouse as many of us do, I believe EL is required by law. I'm shopping for quotes right now.

It's not plus if your spouse wants to get the company money from you it would be through DIVORCE.

Would you seriously have a spouse if you did something that wrong?

Anyway a bit of common sense needs to be applied if you were in a company where your employees were for example on building sites regardless of whether they were related to you or not, then yes it would be a good idea to get EL due to the accident risks. There as if your only other employee just does admin work for you at home then it's not necessary.

BTW insurers policies are done on risk. If they had to pay out for loads of companies via EL then the policy prices would go up.

[Wanderer]

I'm not entirely sure that's right - the exemption for family businesses doesn't apply to incorporated businesses; if you pay a salary to your spouse as many of us do, I believe EL is required by law. I'm shopping for quotes right now.

Do any of your employees have an employment contract? Is it possible they would take you to a tribunal and sue you for wrongful dismissal or claim for maternity/sick/holiday pay? If not then what risk are you insuring against exactly?

[Clare@InTouch]

I'm not entirely sure that's right - the exemption for family businesses doesn't apply to incorporated businesses; if you pay a salary to your spouse as many of us do, I believe EL is required by law. I'm shopping for quotes right now.

I believe it depends on the shareholdings and employees....

"Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company, are also exempt from compulsory EL insurance."

Employers' liability insurance | Business Link

[matzie]

Employer's liability is not required if you/spouse are the directors/sole employees of your company - what are you gonna do, sue yourself for wrongful dismissal?

I'm not entirely sure that's right - the exemption for family businesses doesn't apply to incorporated businesses; if you pay a salary to your spouse as many of us do, I believe EL is required by law. I'm shopping for quotes right now.

[Wanderer]

Check policy but I think you should find it will refer to you or the "insured" which is both the company and directors.

PS Not that any insurance policy is worth the paper it's written on in my experience.

I'll check mine too when i get a chance.

Inclined to agree with that last statement. How else can you buy millions of pounds of indemnity for a few hundred quid? I mean, I wonder if the insurers EVER pay out anything on a policy like this?

[SueEllen]

A previous client insisted all contractors have public liability insurance. The basis was the client was renting a shared office with other companies with shared use of communal facilities. The HR manager told me staff are covered under the company insurance, however contractors are not. So if someone from a shared office had an accident due to some reason of my fault, then at least i am covered, was his argument.

Same reason I currently have PL as I was working for client who used shared offices.

Never needed it before as clients who take up the entire building or have a dedicated floor tend to cover everyone working on that premises as normally non-employees don't get to wander around the parts of the building they are renting including the toilet/kitchen.

Seemed a step too far IMHO as how far do you go with this.

Some people will sue anything or anyone if they think there is money to be had and they had an accident.

But you can get cheap PL from places like directline, although i opted for a more comprehensive policy from kpsol (kingsbridge) - but only after i haggled for a discount (being an ex-Brookson customer).

Mines from the Co-op which was cheaper than DL.

[xoggoth]

Check policy but I think you should find it will refer to you or the "insured" which is both the company and directors.

PS Not that any insurance policy is worth the paper it's written on in my experience.

[diesel]

A previous client insisted all contractors have public liability insurance. The basis was the client was renting a shared office with other companies with shared use of communal facilities. The HR manager told me staff are covered under the company insurance, however contractors are not. So if someone from a shared office had an accident due to some reason of my fault, then at least i am covered, was his argument.
Seemed a step too far IMHO as how far do you go with this.

But you can get cheap PL from places like directline, although i opted for a more comprehensive policy from kpsol (kingsbridge) - but only after i haggled for a discount (being an ex-Brookson customer).

[Wanderer]

Directors or employees can be personally pursued for damages in negligence claims.

http://www.cic.org.uk/activities/1%2...0employees.pdf

So, does your PI insurance cover you personally or just your company?

[northernladuk]

It's £250 and can be claimed as a cost. Buy it, forget about it. Sorted.

[xoggoth]

Professional Indemnity - not legally required but the client could sue your company

Directors or employees can be personally pursued for damages in negligence claims.

http://www.cic.org.uk/activities/1%2...0employees.pdf

[Wanderer]

As SueEllen says:

Public liability is not required unless you operate business premises where members of the public visit you (most likely you don't).

Employer's liability is not required if you/spouse are the directors/sole employees of your company - what are you gonna do, sue yourself for wrongful dismissal?

Professional Indemnity - not legally required but the client could sue your company if something goes wrong. As your company has limited liability, all they would get is the value of the issued shares (typically a few pounds) if you ceased trading with your LTD and started a new one.

Here's the kicker though: Some clients insist that you have some combination of PI|EI|PL insurance or they won't do business with you. It's nothing to do with what's required by law, it's just a condition of doing business with them so in these cases you'll have to get it. It's not especially expensive, do a search of this forum for recommendations.

Some people talk about follow on insurance for 6 years after you leave the client, but I would just cancel it as soon as I could or when I ceased trading with the LTD.

If you work through an umbrella then all this is covered for you. LTD you have to organise your own.

[tulipz]

Thanks. I work for a large bank. I work from their office and have their employees around. No visitors though.

[SueEllen]

It's not mandatory.

It may be needed if you are working from your own or hired premises, and have visitors or employees* on site.

If you are working from another companies premises then they will have their policy on the wall some where and it will clearly define if you are covered or not. With most large companies you are.


*Employees tend to have family come to the office and you need to make sure these family members are covered.

[tulipz]

Hi All,
This is my first contracting assignment and I am doing it through my own ltd company. My accountant called me a cppl of days ago to tell me this - Public Liability Insurance is mandatory. What other types of insurance are mandatory ? I'd be grateful if you can let me know the insurance (one or more??) you hold and the premium(s) you pay for it.

Thanks,
Minie