When you start up any kind of business there are going to be risks. All risks can be covered, one way or another, with insurance policies; but in actual fact, there is only one policy that is legally required for any small business and this is employers’ liability insurance, known generally as EL. This provides your business with cover if a staff member claims they have suffered any kind of illness or injury as a result of working for your company. As an example, if you run that nice sweet little coffee shop and one of your kindly lady employees trips over something in the kitchen and injurs a limb, or she burns herself on the oven or hob etc. This policy covers the firm for claims for compensation in your defense of the case. It is serious and if you are found to be trading/operating without EL, the HSE (health and safety executive) can fine your company up to £2500 for every day it goes unprotected. So apart from the great inconvenience of having a member of staff off for reasons of sickness or injury, flouting this law will be very costly when you are caught.
So, even though EL is the only policy actually required by law, most small business owners wisely choose to select other policies to protect themselves and their business operations against myriad unforeseen events and possible financial losses. They look on it as a sort of investment – they hope never to need it but have it to be on the safe side. Public liability insurance (PL) is a very popular one for most small companies as it covers for claims against the business from members of the public. However careful one is, accidents so often do happen. If one of your business staff causes injury or property damage to a member of the public, your business could face enormous legal fees and compensation claims running into millions. This is where holding a PL policy will prove its worth by covering these costs – an investment that surely pays off.