Combined Liability

The standard definitions of the cover provided by insurers for the three main liability covers are as follows:

• Employers’ Liability

The Legal Liability for bodily injury or disease to Employees as required under the Employers’ Liability Compulsory Insurance Act 1969.

• Public and Products Liability

The Legal Liability for bodily injury or damage to Third Party Persons or Property arising out of the activities of the Business.

The cover provided for Employers’ Liability by insurance policies is generally based on a £10 million Limit of Indemnity for each and every event and includes all costs and expenses payable. Consideration should be given to increase this standard Limit of Indemnity should there be a high concentration of employees at any one site/location.

Employers’ Liability is compulsory under the 1969 Act whenever there exists a Master-Servant relationship i.e. where a person acts under the direct instruction of another. A Limited Company is regarded as a separate entity in its own right and therefore all persons who work for the Company, including Directors, are regarded as its employees. Following recent changes in legislation, an individual can now act as sole Director and Company secretary; in such circumstances Employers’ Liability cover is only required where that one employee owns all or the majority of the issue share capital of that company.

The Limit of Indemnity provided under standard policy cover for Public Liability will apply to each and every incident. In view of high litigation costs and high compensation awards issued, careful consideration needs to be taken as to the monetary Limit of Indemnity provided. Often the limit is driven by an insureds customer who may require a minimum level of cover under a purchase or other contractual agreement.

Products Liability cover is similar to that provided by insurers for Public Liability. However, the standard policies will provide cover for each and every incident and in the aggregate period of insurance. Cover for costs and expenses payable are normally paid in addition to the policy limit of indemnity. These are usually included within the Limit of Indemnity for claims in connection with North America.

Typically policies provide cover for Combined Liabilities on an occurrence basis i.e. cover needs to be in place at the time an incident occurs. However, injury or damage could be caused by a Product sometime after it was supplied. It is for this reason that Products Liability run-off cover should be considered where the supply of a product has ceased in its entirety or is no longer provided to certain territories, especially North America.

In addition there are other aspects of Liability cover to consider such as Full Efficacy and Pure Financial Loss covers.

S-Tech would welcome the opportunity to discuss your full Combined Liability insurance needs. 

Fot further information or a quote, please go to the enquiries page.