The Custodian Insurance Industry Blog

January 6, 2019

What does it all mean?

So many people requesting Public liability when they really mean Professional Indemnity, Employment Practices Liability when they really mean Employers Liability. I hope this helps.

So what are these covers and what do they do?

Professional indemnity:  This protects you against your legal liability toward a third party.  So if you, or an employee, make a mistake which causes a financial loss and a client tries to sue you – this covers you!

Public liability: This also protects you for your legal liability against third parties but for damage or injury.  So if you manage to injure or damage a third party’s property in the course of your business activities then this covers you.

 Employers Liability: if you employ staff then you are obliged to have this cover.  It insures you for your liability to your employees if they develop a disease or injury as a result of their employment with you.

 Employment Practices Insurance:  This covers you for any claim your employee may bring against you for employment matters ie unfair dismissal, harassment and other similar employee/employer disputes

Legal expenses This is not to be confused with professional indemnity. This will usually cover your legal expenses for minor contractual disputes, employment disputes and other similar issues.  It will also usually cover the costs of an HRMC inquiry into your tax affairs

 Directors and Officers Every company director has obligations in law in running a company.  If they breach certain statutes or legal duties they can be held personally liable.  Directors and Officers protects them in the discharge of their duties as a director.

 Cyber cover This is an emerging class of insurance to cover an emerging exposure.  The covers vary considerably from one insurer to the next but broadly speaking this covers damage to your systems caused by third party hacking

So that provides a very short concise guide to some of the key business insurance covers out there.

One last Definition…

IPT This is simply the government tax on insurance premiums.  From 1st October 2016 it increased from 9.5% to 10%.

Please note within each class there is considerable variation, so it is important to read the wording.  Or feel free to call 0207 648 4343 if you need to know more.


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