Commercial liability insurance – also known as business liability insurance or general liability insurance – is needed by nearly all businesses, from small startups to large corporations.
This wide-ranging insurance will protect your business from financial losses caused by claims for injury or damage resulting from its operations, products, or services.
Every business is different and the scope of coverage will depend on factors such as industry, type of product or service, client base, and whether you operate internationally.
Key commercial risks
Injury to a customer
Damage to property and assets
Business interruption and revenue loss
Harm from a defective product
Accounting and administrative errors
Employee legal actions
Cyberattacks/data breaches
Technology failures
Legal action for mismanagement
Environmental damage
Contractual breaches
Regulatory actions
Transport/supply chain problems
Political instability and terrorism
Public liability. Covers claims and legal costs if a third party suffers injury or property damage whileon your premises, or while you’re working ontheir premises.
Employers’ liability. Covers the cost of compensation claims arising from employee illness or injury sustained as a result of their work during working hours.
Product liability. Covers manufacturers, distributors, suppliers, retailers, and others who are responsible for injuries caused by their products.
Personal accident. An additional level of protection to employers’ liability, providing pay-out to employees regardless of employer negligence.
Auto liability. Cover should a firm’s fleet of cars require large limits of indemnity for automobile/motor liability above and beyond traditional limits of indemnity
Pollution liability. Covers bodily injury, property damage, defence, clean-up, and related defence costs as a result of pollution.
Product recall. Covers expenses associated with recalling a product from the market including covering costs such as customer notification, shipping costs and disposal costs.
Contractors’ liability. Cover for general liability risks specifically for contractors who pose a higher risk of claims and as such require dedicated specialist coverage.
Commercial liability insurance FAQs
Who needs commercial liability insurance?
Any business that interacts with the public or manufactures/sells products should consider commercial liability insurance. The level of risk varies by industry/profession, but every commercial enterprise will pose risks for its employees, customers and the general public.
Is commercial liability insurance and legal requirement?
Employers’ liability: This is a legal requirement in the UK for businesses employing staff.
Public liability: Not a legal requirement but it is often a contractual one and is highly recommended.
Product liability: Not a legal requirement but it is strongly recommended for any business making, selling, or supplying products. Business partners may also make it a contractual requirement.
Commercial auto insurance: If your business uses vehicles for work, you are legally required to have motor insurance.How much cover do I need?
The amount of cover will depend on your industry/sector, business size, and the level of risk. Businesses with high public interaction, such as retail and events, may need relatively high levels of cover. There may also be individual contractual requirements depending on business relationships. For expert advice, contact Elmore.