Is your business covered for any potential liabilities? Peter Robinson, Managing Director at Prizm Solutions, insurance brokers specialising in SME and Corporate business insurance sectors provides an overview of the types of insurance your vehicle recycling business should be covered for.
As a specialist Insurance Broker in the SME and Recycling sectors, the two questions I am frequently asked are 1) What have I GOT to have? and 2) How much is it going to cost me?
The crucial thing all businesses need to be aware of is that if a company has more than one director or any employees, then by law, it has to have Employers Liability insurance or face a fine of up to £2,500 per day!
And please don’t think that ‘Fred’ isn’t an employee because he is self-employed. The law says that whenever there is a Master/Servant relationship (and no, I don’t mean as in ‘50 Shades of Grey’), it simply means if you give someone an order, then you are their master and you are legally responsible for their Health & Safety.
Employers Liability covers injury or illness to employees. In reality, you can only buy this together with Public Liability insurance which covers injury or damage to third parties (anyone not an employee) or their property. So, suppose, for example, someone trips over a cable on your premises. In that case, if they are an employee, it is an Employers Liability claim, and if they are anyone else, it is a Public Liability claim, and if the cable falls on their car that is also a Public liability claim.
As for the cost? How long is a piece of string? The main factors that drive liability premiums are your turnover, how much you pay your staff, what you do, where you do it, your experience, what your H&S is like, any previous claims, and then the moral hazard questions, have you a criminal record? Have you ever been made bankrupt? Or been a director of a company that has gone into liquidation? If you don’t tell insurers about these (minor) details on Day One, the Insurance Act 2015 allows the insurer to refuse to pay any claim, cancel your policy and in certain cases, even keep the money you’ve paid them.
Most people know about Motor insurance. But what they don’t realise is that if any motorised, mechanically propelled vehicle is being used in a place where the public has access (think golf carts or beach buggies or forklift trucks operating into/out of your yard), then they have to have Motor insurance too…
So after you’ve got your essential insurances sorted, you start looking into the next layer of insurance, the stuff you probably should like to have (e.g. Directors Liability or Cyber), and after that, there are the ‘luxury’ insurances, such as Private Medical insurance.
Directors Liability, for example, is a type of insurance which a lot of business owners haven’t heard about, but should have as it’s paid for by the company and is there to protect the individual director in case he/she gets personally sued due to something to do with the business.
One claim I handled many years ago involved an apprentice getting run over by a forklift truck and the H&S Director at the company concerned was personally interviewed by the H&S Executive under the Police and Criminal Evidence Act and wasn’t allowed to use the company lawyer. He had to pay for his own, which this type of insurance paid for and the defence costs of that was over £25,000!
Suppose you have a mortgage or a loan to buy premises or machinery too. In that case, you will need to ensure it as a condition of the agreement and that means against all type of damage, including terrorism (again, beware the small print) and failure to do so could result in your loan becoming payable, in full, immediately.
Sorry if I come across as a gloom-monger, but I’ve been doing this job for nearly 40 years and during that time, I have been involved in some horrible claims, which is when you need your insurance company to step in and help, not send you an email saying thanks but no thanks.
And yes, contrary to what you read in the papers, most insurance companies DO pay claims quickly and fairly. Clients of ours have had nearly £1 million paid out for Pandemic Business Interruption claims.
So stay safe and take care out there, because sometimes there ARE monsters lurking under the bed.