Broker Urges Businesses to Shout ‘I’m a Liability’

Award-winning commercial insurance broker, McCarron Coates, is warning businesses about the risk management jungle and says many business owners should be shouting, “I’m a liability; help me out of here.”

The award-winning broker says businesses should anticipate forthcoming increases in risk exposure, claims and litigation, as economic recession bites, urging firms and the self-employed to get their liability covers in order fast. 

McCarron Coates believes many firms understand direct risks, such as material damage and theft. What they often fail to appreciate is the range of ways they could be found liable for a loss or personal injury, mental or physical.

Liability insurance covers a business against compensation for injury or property damage and  claims brought against them because of their negligence or failure to perform a legal duty.  A claim can be brought by an employee, customer, a member of the public or even a shareholder or investor.

Such claims typically involve personal injury, or property loss or damage.  However, in the case of shareholders and investors, they could also involve requests for compensation for financial losses incurred through business mismanagement.

McCarron Coates believes there is a general lack of engagement with liability insurance, because it is a little ephemeral.  Additionally, because Employers Liability insurance is something they legally have to buy if they are an employer, businesses do not tend to spend much time considering its advantages.

Public liability insurance, whilst not a legal requirement, is essential protection within sectors such as construction.  Many tenders and contracts expect a business to have such cover in place.  However, many other firms and self-employed professionals will overlook this protection and not purchase it.

This is despite a whole range of businesses transacting part of their business in the public domain or having visitors to their offices.  Whether you cause a trip or slip, pour tea accidentally on to someone’s laptop, watch them being hit by a toppling piece of equipment, or accidentally stain their designer sofa with ink, whilst taking down a brief, you can be liable. 

Professional Indemnity insurance is another liability insurance some consultants and advisers overlook, particularly in the freelance economy. Yet, offering clients the wrong advice, or producing a piece of work negligently, could cost significant losses – money the client will wish to recover.

Businesses can also fail to consider other liability covers, such as product liability.  Pivoting or diversifying can often lead to businesses straying into new areas of production and risks associated with their product potentially causing harm, may not be fully appreciated.

Environmental liability insurance is something relatively few businesses consider, even though a spillage of oil could pollute an area of land, or discharges could adversely impact water courses.  A haulier could find their toxic load spilling everywhere and then learn that environmental clean-up charges are eye-watering.

Then there is management liability insurance, perhaps the most overlooked liability cover of all, because so many directors wrongly believe Limited Company status protects their own finances in the event of any claim against the Company.  A director or senior manager can actually be held personally liable for a wide variety of scenarios and infringements, from health and safety breaches to failure to chart the right financial course.

If a case is pursued against an individual director – or senior manager (officer) within the business – they would need to finance the compensation claim and their legal defence themselves, unless they had taken out management liability (Directors & Officers) cover.

“Businesses large and small, and across all sectors, need to wise up to the compensation claims that can arise, through being deemed to be liable for another person’s losses or injury,” says McCarron Coates director, Luigi Maggio.  

“Businesses should be shouting, ‘I’m a liability, help me out of here’ and seeking solid broking advice and a review of their exposures.  Certain liability covers and top-up legal expenses protection could be absolutely vital, not just for their company’s protection, but for that of their family finances.”

To access McCarron Coates’ guidance on this issue, please call 0113 298 3489.  More information about the award-winning broker is at www.mccarroncoates.com

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Editors notes

McCarron Coates is an award-winning insurance broker, based in Morley, Leeds, which is a specialist in fleet transport insurance, as well as supplying many other types of commercial insurance policies and risk management services.