How Liability Insurance Reduces Risks
Liability Insurance is a system of risk financing to protect the insured from the risk of liabilities that are imposed by lawsuits and other claims. There are different types of liability insurance and it includes business liability insurance, general liability insurance, fleet insurance, PI insurance and others. If a person is hiring staff for his/her business it is compulsory by law to cover them against any kind of accident or injury at work. In some context this also encompasses self employed contractors. Being an employer it is significant that a person should have an insurance cover that would financially support in case an employee is injured, killed or falls ill while at work. Employer’s liability insurance is mandatory by law in most nations across the world.
Benefits of Employer’s Liability Insurance
In case if an employee suffers from any injury or dies while at work, the employer’s liability insurance is responsible to pay the employee’s family. The employer’s risk against the huge claims from the employees is reduced by such kind of an insurance policy. Not resorting to such policy is harmful for one’s business as accidents are quite frequent and instead of all the precautions and safety measures they are unavoidable. With gaining importance of the policy worldwide, business houses without the policy may encounter huge costs.
Planning for Employer’s liability Insurance
Employer’s liability insurance is generally arranged while applying for business insurance. Mostly, business owners do not recognize that business insurance incorporates different kinds of insurance that is pertinent for the business and may embrace Employer’s liability insurance, general liability insurance, building insurance or property insurance and motor vehicle insurance.
Cost of Insurance
The cost of any insurance is determined on the basis of the claims, experience of the country and the perceived risk factor and are often decided upon by the insurance companies themselves. Within the same industry, the cost of insurance may vary based on the different categories the employees belong to. As for instance, the cost of insurance for those working on scaffoldings and roof tops is higher compared to painters or fitters. On a similar note, the cost of insurance for those working inside an office is lower compared to those who work in the field.
The liability insurance is supposed to cover all the employees in the organisation. In some employer’s liability insurance policy, the precise details about the number of permanent and temporary employees are required.