Basics of Liability Insurance

Liability cover pays when someone else claims against you. For a business, it is often the difference between a bad quarter and a closed company.

Who needs it

Any business with premises the public enter, products that reach consumers, professional advice that clients rely on, or directors making decisions. In practice, that is most businesses.

The main forms

Public liability covers injury or damage to third parties. Product liability covers harm caused by what you sell. Professional indemnity covers claims arising from advice or services. Directors and officers cover protects individuals for decisions made in office.

Claims-made versus occurrence

Most professional and D&O policies are claims-made: they respond to claims notified while the policy is live, regardless of when the act occurred. Let the policy lapse and you lose cover for past work.

Limits worth carrying

Defence costs alone can exhaust a small limit. Check whether costs are inside or outside the limit of indemnity — it materially changes what you actually have.

Before you decide

Everything above is general. What is right for you depends on what you are protecting, what you already hold, and what you can sustain. That is a fifteen-minute conversation, and it is free.