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Public and Employers Liability Insurance - Overview

IT Contractors often take out Public and Employers Liability Cover when they apply for a Professional Indemnity Insurance Package. Here is an overview of what such policies cover.

Public Liability Insurance

Public Liability insurance is designed to cover businesses from the threat that they will be sued from a member of the public.

It's official definition is:

The insurance of liability for accidental bodily injury or damage to the property of third parties.

Essentially, public liability will cover your company if it causes the injury (or even death) of a third party. You will also be covered if you damage a third parties property.

As an example, Public Liability insurance would cover your business if you accidently caused your project manager to break his arm while tripping over a server you have been installing at a client site. You'd also be covered if the server was also damaged in the process, as well as your colleague!

Employers Liability Insurance

Most Limited Companies are required, by law, to take out Employers Liability Insurance (even if it doesn't seem to be necessary due to the line of business you're in). (The Employers' Liability (Compulsory Insurance) Act 1969)

This cover protects "employers" for any claims for injury or illness from their "employees", where the employer has been negligent. The Act requires employers to have £5m of cover, although most insurers provide £10m as standard.

The Act was amended in 2005 to allow Limited Companies with a single employee (who owns 50% of the share capital or more) to be exempt.

However, this type of cover is still recommended for all IT contractor companies, as having cover could provide a pointer towards "self employment" as per the IR35 rules. You may need a substitute to perform contract work if you are ill, or you may employ someone from time-to-time in the course of your business.

Get a Quote

You can get q quote for public / employers liability insurance from our partner, Hiscox. for Liability Insurance.

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