A survey reported by Independent in 2013 found owners of small businesses to be most concerned about the possibility of getting sued. This is understandable given the abundant employment law that has to be taken account of in serious attempts to prevent legal action being brought. Fighting a court case can also be an unwelcome financial drain on a small company that might already be struggling to find new ways of trimming expenses and bringing the profit it needs for growth.
Not all publicity is good publicity
When the threat of legal action does hang over a business, this can be widely publicised. Last year, it was discovered that Apple was, with a software update, disabling iPhone 6 handsets that third-party contractors had repaired. A barrister explained to The Guardian that this “reckless” policy of Apple’s could potentially have been deemed a violation of the Criminal Damage Act 1971. This legislation outlaws the intentional destruction of another person’s property.
Apple later rectified the problem by issuing a further software update allowing “bricked” iPhones to be restored to working condition. However, this was not before a flurry of negative publicity – the kind that a company of Apple’s size could fairly easily cushion, but would have the potential to seriously adversely affect a small company’s reputation and, thus, financial health.
Be proactive, not reactive, in ensuring product safety
While the “Error 53” scandal, as it could be called, inconvenienced many Apple customers, those people would not necessarily have been in serious danger. Your business needs to make sure that what it offers to customers is not merely functional, but also safe.
If your company is in the property sector, it might regularly import products for its customers to use in their properties. The UK Government website explains that products sold to consumers are legally required to be safe. To ensure this, importers – as well as producers and manufacturers – are required to warn consumers about potential risks, provide details to help these consumers understand risks, monitor products’ safety, and act if a safety dilemma is discovered.
You need to be active in preventing safety issues to avoid the risk of getting sued, fined, or even imprisoned. Toys and food are examples of high-risk products, the specific regulations applying to which you should also educate yourself about. Avoid selling any product which you are aware, or should be aware, is unsafe.
Your own employees could potentially sue you
While, as an owner of a small business, you might reckon that you will now be very careful to keep employees safe, you can’t entirely rule out the possibility of mistakes happening. For this reason, you can give your company something of a financial cushion by taking out insurance.
You might already be aware of the wisdom of doing this; the survey cited by Independent found that two thirds of people owning small businesses purchased insurance as soon as their businesses were launched. However, you might not be thoroughly knowledgeable about the different types of insurance available and how you can find the most suitable policy for you and your business.
The different forms of insurance include employers’ liability insurance, which is legally necessary for many businesses. EL, as this insurance is known in abbreviation, can assist you in paying compensation to employees who pick up an injury or sickness directly arising from working for your company. A worker who is beset in this way is entitled to claim or demand recompense. Firms exempt from the necessity of EL include ones without employees, not to mention family businesses with which only family members are employed.
Does your company require public liability insurance?
If your business regularly comes into face-to-face contact with members of the public, taking out public liability insurance is also recommended. How much of this cover you should choose will depend on the nature of the business. If it is based at your home where you rarely meet up with customers, a low level of cover might suffice. However, a bricks-and-mortar outfit which many customers daily frequent could necessitate a higher level.
While such insurance is not compulsory for private sector companies, it remains advised that they have policies. A policy could end up paying for itself if your firm indeed runs into trouble with a customer who has suffered an injury at your premises. Public liability insurance can also help pay for costs of you inadvertently damaging an individual’s property while working there.
Nonetheless, you can help minimise your regular financial outlays for public liability insurance when you source it through a broker like Be Wiser. This Hampshire-based company can assist you in comparing quotes for such insurance from various UK providers. Be Wiser can then tailor the liability cover to make it even more relevant for your company’s specific requirements.
Author: Estate Agent Networking UK
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