Public liability Insurance

[UKSBD]

Hi all,

Ihave a small home based business mainly connected to marketing.
I have it set up as a limited company with just myself as director and my wife as company secretary (no other employees).
To date, I have never bothered with any kind of public liability insurance
but as I am doing more and more dropshipping now wonder if Ishould have? Is it compulsary to have Public Liability, or if not should I anyway, and if so any recommendations on who to go with?
TIA.

[Astaroth]

In general business it is not compulsary to have public liability insurance (though there may be certain sectors where it is) but it can be highly recommended.

The best thing presently to do is probably go to a local broker and see what they can recommend for you - be aware though that for a lot of commercial insurance it isnt like getting a quote for motor insurance where it is all done and you have your price within a minute or two.

Alternatively you can go to your bank and they will undoubtably have a partner who does an insurance offering

[fastfences]

I thought it was compulsory for a Limited company to have Public Liability Insurance?

Cheers, Nigel

[Astaroth]

Not which I am aware of but whilst my employers to underwrite PL insurance I was never involved in that aspect when I was in operations - I am just remembering back to my days of studying for my diploma of insurance which only stated that employers liability and motor insurance are the only two legally required types of insurance (and national insurance if you want to count it)

Things could have changed but to the best of my knowledge it isnt compulsary for any class of legal entity

[UKSBD]

Thanks for the replies both.
Raised another question now, as it is just me and the wife at the moment
should we have employers liability?
I think I will have to take a trip to the brokers in the morning.

[bwglaw]

If it is just you and your wife then Employers Liability Insurance is NOT required. In employment law, a husband and wife relationship is treated differently to a bona-fide employee/employer relationship and in most cases you have no employment rights.

If you have contact with any of your clients, or if they are visiting your premises then you must have Public Liability Insurance.

Additionally, if you have clients coming to your house to discuss business then you do need to speak with your Local Authority because you do need a licence to run a 'business' from home. This is only the case if you occupy more than 25% of your home as an office/business and you have clients visiting, vans parked outside etc which may cause a nuisance to your neighbours.

[pplum]

I saw this after looking for forums on the internet regarding insurance.

I'm just letting everybody know that, if a company is a Limited Company with more than one insured person, Employers' Liability is compulsory regardless of relationship to the proposed person.

If the proposed person is a sole trader then it is NOT compulsory to add anyone in the immediate family for Employers' Liability but this is the only time this is not required.

[davidakerr]

You may also wish to speak to the FSB. One of the benefits available as a member is discounted ELI and PLI, along with a host of other benefits that may help you in your business.

[noidea]

ELCI and PLI are different. ELCI covers your staff (Compulsory i.e. what the C stands for) and PLI is to cover you from claims of those who are not your staff i.e the Public. If you don't have the public on the premises you don't need it.

[BakerSN1]

You are correct ELCI is compulsory for LTD companies. Your statement regarding PL is however incorrect. If you do not have customers onto your premises then the risk of a claim is reduced, however, if you are out and about in the course of your business and cause damage to third party property and cause bodily injury to a third party then you will have nothing in place to protect any claim made against you.

If a business does not have PL cover and injures somone or damages their property, is sued, can not afford to pay the compensation or paying the compensation puts them out of business, then any investors, the bank and any creditors would have an extreemly strong case against to recover their money from the owner/directors. They can take property and assets from them.

This is becoming more common where the creditors are able to prove that a decision was made that has put the business in a vunerable position and that decision was not one that would be expected of a competent and dilligent businessman/woman.