What Employers Need To Know About Liability Insurance For their Employees

Public liability insurance for employers protects them from liability for accidents and the resulting lawsuits that may be caused by their company’s doing business. Any damage covered by the actions of employees of a business would be covered by this type of insurance.

Companies with employees, especially large numbers of them, need to have a way of making sure that these individuals do not create a situation in which the company becomes involved in legal trouble as a result of their actions. Though a business may do their best to make sure that no such mishaps occur, it can be difficult to be certain what the competence level of every employee is. Public liability insurance gives a measure of security here.

What Does Public Liability Insurance Cover?

Public liability insurance covers a business against harm to individuals or damage to property caused by a business. A business essentially consists of employees involved in various tasks and so this kind of insurance, though it applies to the business as a whole, can be seen as a way of insuring that the negligence or oversight of employees does not get the company into costly legal trouble.

The following are some scenarios in which public liability insurance may become useful or even vital and indispensable:

An employee in a construction crew leaves a heavy box of tools on top of a girder of a construction project during a lunch break. Another employee attempting to climb down off of the girder upsets the box of tools and it falls 25 feet down, striking a pedestrian and putting him into the hospital with major head trauma.

The individual sues the company for negligence – no tools should have been left on the girder during a lunch break. There is virtually no question here that this is the company’s fault. Public liability insurance would pay on the claim and thus avoid a costly law suit that the company would most likely not win.

A movie crew begins filming on location in a busy city street. One of the individuals operating the camera, unbeknownst to the other members of the crew, has significant psychological problems of a psychotic nature. Though seemingly normal enough to begin with, he goes into a psychotic episode while filming and begins throwing items into the street and at passers-by. Something he throws injures a pedestrian. Before anyone knows what to do he throws a movie camera into the street which lands on the windscreen of a passing car, shattering it, and sending the car into a blind swerve. The car swerves onto the pavement and injures still other pedestrians.

In a nightmarish scenario such as this public liability insurance would be even more necessary. The resulting damage would be both to property (the car) and individuals (the injured pedestrians). The important point in this example is that the damage would have been caused by an employee and that this would not have been suspected initially. This illustrates that it is not always possible to know how an employee will react in a certain situation.

Some Things to Keep in Mind Regarding Public Liability Insurance

The company you deal with for public liability insurance will base your rates on a number of different factors. Some of these include the following:

The Nature of the Work your Company is Involved in

Different types of business activity have different levels of risk to the public. So one of the things that your insurance company will probably want to know is not only what type of business your company conducts but specifics about its activity such as how much contact with the public it has, where it is located, the specific risk levels of various different activities and so on.

When the Business Started

The company will want to know when the business began. If it is a public company they will probably ask when public shares began to be traded. This gives them a sense of how much experience the business has with the work it does, which can affect risk level. It also gives them an idea of the financial stability of a company.


The insurance company may ask about the experience of the owner or various employees. If you are experienced as a business owner and have owner similar businesses before, or perhaps worked for them, you can get a reduced insurance rate because the company reasons that you will probably be less likely to make errors.

Number of Employees

The insurer will want to know the number of employees employed by the business. To some degree more employees means more accident potential, though in some cases the opposite may be true. For instance an understaffed construction crew might be more dangerous than one with an adequate number of workers.

If you are an employer you should definitely consider public liability insurance. It can be a great way to insure that employee error doesn’t cause some kind of disaster to befall to your company’s reputation and finances. This will give your company peace of mind and a sense of confidence in dealing with the sometimes hard to predict nature of life in the modern business world.