Does Public Liability Insurance Cover Employees?
Public liability insurance protects a business from the claims of a third party stating that they were injured from their services or their property was destroyed. So, in short, no, public liability insurance does not cover employees.
This is because the ‘third-party’ cannot be an employee, so claims can only be filed by a person not directly involved in the insurance policy, like a client or passer-by. Nonetheless, public liability insurance should still be obtained to protect the company from the extra expenses of claims. Other covers should be sought after to cover the employees if they are injured.
Who Does Public Liability Insurance Cover?
As aforementioned, public liability insurance covers the business that obtained insurance, termed the first party. It protects them from third-party claims usually filed by a client who sustained a bodily injury when utilising the company’s services and holds them liable.
Often, the client expects their medical bills to be paid for because the injury occurred at the establishment site, like slipping on a wet floor or tripping over a kit left on the floor. Suppose they require medical attention or need pain medication to aid their recovery. They may file a claim that the insurance company would cover so that the company does not suffer financially—claims of bodily injury filed by clients and members of the public.
If anyone walking by was hurt because of the company, they could also file a claim like a passer-by. For instance, they may have stopped next to the property, and the overhanging eave of the roof was unstable and fell on them. They would suffer severe injuries. In the worst case, a legal dispute may even occur; public liability insurance would pay both the medical expenses and litigation fees.
Another common reason businesses obtain public liability insurance is accidentally damaging a customer’s property. Professionals in which this may be necessary are those who work in close contact with clients like couriers, builders, and tutors.
Accidents are inevitable, and a worker may likely spill water over a client’s phone during an appointment, knock their computer off the table when walking past, or stain the carpet with wine or paint. Whilst it is not intentional, the event happened because of the worker. So the company would be responsible for paying the replacement costs of the phone, computer or furniture destroyed in this circumstance.
Which Insurance Policies Cover Employees?
Although public liability insurance does not cover employees, adequate insurance does. Employers’ liability insurance is a form of protection for workers who were injured due to the tasks they performed at work or any accidents that resulted in their harm and is a mandatory requirement in the UK. Since 1969, the Employers’ Liability Act made it compulsory for companies that hired employees to obtain this insurance, with a minimum of £5 million worth of cover.
Failure to obtain this insurance results in a £2,500 fine, as well as up to £1,000 if it is not presented whenever an officer of the law asks to see it. But what does it cover? The employers’ liability insurance policy can compensate a worker for any medical expenses because of short-term injuries like slips and trips, which can have minor repercussions like a sprained ankle, broken finger or even just mild pain.
Furthermore, long-term injuries that result from years of working at a business may require more significant amounts of compensation and care.
For example, builders often suffer from back pain, hearing loss and shoulder injuries from physical labour and loud noise. Similarly, an IT consultant may have sustained a severe injury to their eyes from lousy lighting and minor breaks. The medical costs associated with long-term injuries are more expensive, but they would still be covered.
Employers’ liability insurance also reimburses employees for the income they lose when they are involved in a worksite accident and spend time at home or the hospital to recover. This is given as a lump sum and depends on the level of cover obtained. Such insurance is beneficial not only for employees but also employers. Whilst the employee receives adequate medical treatment and still receives their income.
The employer does not have to pay these costs and even has their legal fees compensated by the insurer should the worker file a lawsuit.
To reiterate, public liability insurance covers a business when third parties claim they were responsible for their injuries, whilst employers’ liability insurance protects employees when they are the ones hurt. Both covers are advantageous for a business because the insurer safeguards both parties involved from financial loss.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Project Manager Insurance
Property Manager Insurance
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