smallbusiness.co.uk: Helping your business think big

Check out the key points around personal liability insurance.

As a business owner or employer, you have a legal responsibility towards your employees, customers and the public. You could be held legally liable and risk being sued if an employee or a member of the public is injured as a result of your negligence or breach of duty.

If their personal injury compensation claim is successful, you may also face a claim from the NHS for the costs of hospital treatment (including ambulance costs). Liability insurance is designed to pay any compensation and legal costs that occur if an employer is found to be at fault.

If you employ anyone it is most likely that you will need to have employers' liability compulsory insurance (ELCI). ELCI requires employers carrying out business in the UK to insure their liability to their employees for bodily injury or disease sustained in the course of their employment in the UK.

It provides greater security to firms against costs which could otherwise result in financial difficulty, and to employees that resources will be available for compensation even where firms have become insolvent. Source: Business Link.