Many hauliers should be shouting, “I’m a liability; help me out of here” as the recession ramps up their exposure to risk, claims and litigation, according to commercial insurance broker, McCarron Coates.
The broker is advising hauliers and self-employed drivers to get their liability covers in order as soon as possible.
McCarron Coates argues that whilst many firms understand direct risks, such as material damage and theft, they often fail to appreciate the myriad ways they could be found liable for a loss or personal injury, mental or physical.
Liability insurance covers a business against compensation for injury or property damage and claims brought against them because of their negligence or failure to perform a legal duty. A claim can be brought by an employee, customer, a member of the public or even a shareholder or investor.
Such claims typically involve personal injury, or property loss or damage. In the case of shareholders and investors, they could also involve requests for compensation for financial losses incurred through business mismanagement.
McCarron Coates believes there is a general lack of engagement with liability insurance, because it is somewhat ephemeral. Additionally, because employers are legally required to buy employers' liability insurance, the broker believes businesses do not tend to spend much time considering other non-mandatory liability insurances.
It points to public liability insurance, which is not a legal requirement, as a cover that many firms and self-employed professionals overlook.
“This is despite a whole range of businesses transacting part of their business in the public domain or having visitors to their offices.
“Whether you cause a trip or slip, pour tea accidentally on to someone’s laptop, watch them being hit by a toppling piece of equipment, or accidentally stain their designer sofa with ink, whilst taking down a brief, you can be liable,” McCarron Coates warns.
Environmental liability insurance is another insurance ignored by many firms, McCarron Coates said, despite evident risks such as a spillage of oil which could pollute an area of land, or discharges which could adversely impact water courses.
“A haulier could find their toxic load spilling everywhere and then learn that environmental clean-up charges are eye-watering,” the company added.
Many directors overlook management liability insurance, wrongly believing limited company status protects their own finances in the event of any claim against the company, the broker said.
“A director or senior manager can actually be held personally liable for a wide variety of scenarios and infringements, from health and safety breaches to failure to chart the right financial course.
“If a case is pursued against an individual director – or senior manager within the business – they would need to finance the compensation claim and their legal defence themselves, unless they had taken out management liability cover,” the company warns.
McCarron Coates director, Luigi Maggio, said : “Businesses large and small, and across all sectors, need to wise up to the compensation claims that can arise, through being deemed to be liable for another person’s losses or injury.
“Businesses should be shouting, ‘I’m a liability, help me out of here’ and seeking solid broking advice and a review of their exposures. Certain liability covers and top-up legal expenses protection could be absolutely vital, not just for their company’s protection, but for that of their family finances.”