Why is business insurance necessary?

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Employer liability insurance is a broad topic covering many aspects of the employee-employer relationship, and is the most important type of insurance for any business. Knowing exactly what situations you as the employer are responsible for and why are of the utmost importance. Liability protection is for employers in the event that an employee is injured at work, or an employee or former employee becomes ill as a result of your work environment. In these cases you may or may not be financially responsible as an employer, but the most important thing is to have the funds and resources if a case is filed. A case can be filed for accidents and illness on or off the job site. In accordance with the Employers' Liability Act of 1969 you must have a minimum amount of insurance against any such claims. One situation that may differ is when an employee is injured in a motor vehicle, which may be covered by your automotive insurance.

One common misconception about employer's insurance is that is also protects you in cases where someone other than an employee is injured or becomes ill from your work environment. Although it is not required by law, liability insurance to cover claims against you or your business by members of the public or other businesses, known as public liability insurance, is just as important as employer's coverage. The world is an uncertain place and accidents happen, if a customer or member of the public is injured while on your premises you can be held responsible. This is particularly important in industrial, retail, shipping and restaurant applications.

There are some unique situations in which you may not be required to carry employer liability coverage, and one case is when your employees work abroad. Independent contracting has become a new trend in the business world and is a great resource for many businesses. In the UK, if you have employees based in England, Wales or Scotland you will be required to provide employer's liability coverage, and this does include off shore installations. If your employees are based abroad and spend more than 14 consecutive days in Great Britain or 7 consecutive days on an off shore installation, you will be required to carry employer's insurance for them. If neither of these situations apply, you do not need employer's insurance, but the country the employee lives in may have requirements of their own. It is a good idea to check the laws and statutes just to be safe.

There are many outlets for employer's liability insurance, and there are just as many rules and regulations governing them. The most important aspect of finding an insurance provider is to make sure they are authorized to provide that type of coverage, and to make sure that the coverage is in accordance with UK laws. Authorized insurance providers are bound by the conditions of the Financial Services and Markets Act of 2000, and a list of authorized providers is maintained by the Financial Services Authority (FSA). You can easily check the status of an insurance provider on the FSA website by entering the companies register, or you can contact the FSA directly.

There are several conditions that may restrict the payout of your insurance. Insurance companies can deny claims for situations like failure to properly protect employees, lacking safety practices, inaccurate records and failure to comply with insurance regulations, just to name a few. You need to be aware of any conditions in your coverage and be sure to follow through with any tasks set forth in the policy. Policies that require risk assessments and certain precautionary steps make it possible to deny compensation, or even sue you for the amount that was compensated if the insurer can show your business did not comply with these conditions.

Each business will need a certain amount of coverage to comply with UK law, and at this time that is a minimum of 5 million of employer's liability coverage. If you are doing business as a group, or part of another group, you can get a policy for the group as a whole. In this case you would be only be required to carry the 5 million for the entire group, which can be great savings for the group. Many types of business may be required to carry even more coverage. The risk factor can increase dramatically for businesses involving computer software or machinery for example, and the law may require a much larger amount of protection because of this. The best first step is to have an insurance specialist help you evaluate your needs, and together you can be sure you comply with the laws and protect yourself, your employees and the public at the same time.
 

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