Liability Insurance – Is your Cover Adequate?

Liability Insurance

Small businesses as well as large ones can have catastrophic losses which may impact on you if your insurance is inadequate.

You have no doubt already purchased Employers, Third Party, Products and Motor Liability insurances to protect your business but are the current indemnity limits high enough?

Levels of Awards in the USA have historically been a multiple of the equivalent in the UK (sometimes as much as 20 times) ; however the range of liabilities which can be incurred by a manufacturer or supplier in the UK means that court awards (especially injury awards) are growing at a much faster rate than inflation.

A company that is faced with a large court award and that does not have sufficient liability insurance cover could suffer severe financial strain, in some cases even having to file for bankruptcy. A cost effective excess liability programme could cover such awards.

Typical Cover:

  • Employers Liability is generally provided to a Limit of £ 10,000,000 Any One Claim or Series of Claims from One Incident – Individual circumstances are different but an accumulation of staff on one location might be a reason to consider the adequacy of this figure.
  • Third Party Liability may be as low as £ 5,000,000 Any One Claim or Series of Claims from One Incident whilst Products Liability is restricted to a Limit which applies is further limited to Any Period of Insurance – Whilst individual circumstances will differ, realistically you should consider at least £ 10,000,000 of cover..
  • Motor Third Party Property Damage Liability is generally provided to a Limit of £ 20,000,000 Any One Claim or Series of Claims for accidents involving Private Cars but is likely to be reduced to £ 5,000,000 for accidents involving other vehicles, including HGV’s – How much damage can a 44 ton vehicle do?

Excess Liability Insurance – Typical Claims Examples

The following examples are provided for illustrative purposes only but are actual accidents which have occurred.

Employers Liability

  • An explosion at a plastics factory killed nine people and injured dozens of others. The cause of the accident was never confirmed but was believed to have involved a gas oven on the premises.

Third Party &/or Products Liability

  • A machinery manufacturer supplied a defrosting machine to a food processing plant. The machine caught fire resulting in the complete destruction of the factory. Total cost was £ 80 MILLION.
  • A retail butcher was allegedly the cause of an E-Coli outbreak arising from the sale of contaminated cooked meats. Twenty people died and many more suffered serious illness. Compensation claims were received from both the injured people and the dependents of the deceased.
  • A clothing manufacturer exported children’s coats to USA. The coats proved to be inflammable, resulting in a number of serious burns injuries. Not only were the awards for damages considerable but the legal and other costs alone exceeded £ 1 MILLION. As with all product claims, a series of incidents quickly leads to the erosion of the limit of liability.
  • A 2-man business working as a sub contractor to the principal contractor on site caused £ 8 MILLION of damage when sparks from welding work they were undertaking started a fire that destroyed a new office block.

Motor Third Party Property Damage Liability

  • A lorry driver lost control of his vehicle which ploughed into a petrol station causing a massive explosion. Fortunately nobody was seriously hurt but damage to the petrol station (including a number of vehicles) was extensive and it was several months before it reopened for business.
  • All 10 carriages of a train derailed when it hit a vehicle at a level crossing. Seven people were killed and 37 injured.

What are the UK’s most dangerous jobs?


As an established independent insurance broker, Northern Alliance deal with many clients that have large risks associated with it. It is our job to ensure you are fully covered and have that peace of mind should the worst happen.

We have come into contact with business owners who want the best deal possible, which is perfectly understandable. By doing this they are willing to cut corners & potentially leave them themselves under insured if the worst should happen.

So we thought we would provide a brief summary of the most dangerous jobs, which may make you think twice about cutting corners & going for the cheapest option.

Farming & Fishing

Let’s start with the farming & fishing industry. Although Agriculture makes up a rather low proportion of the job market, there were 33 fatal injuries according to the latest statistics.

There are many reasons why this sector is a high-risk industry. Some of the most common reasons for accidents are machinery not being properly maintained, training of farmers had not been adequate enough or individuals falling from heights.

In 2011 a farmer in Coventry, who had an accident when he was just 23. “I’m 30 now and I wish I’d just trusted what I’d done and left it alone.”

Whilst injuries and deaths have fallen in recent years they still represent a high risk for accident & death. Commercial fishermen remain one of the most dangerous professions out there. According to a study from Oxford University
Fishermen are 50 times more likely to have a fatal accident compared to other professions.


If you thought the farming & fishing industry was bad, the construction industry has a rather high number of accidents & fatalities. The total number of fatal injuries came to 49 in the year.

The riskiest professions include roofers, scaffolders, steeplejacks, plumbers & steel workers. Most accidents occurred from slips, trips, falls & electrical shocks.

Another risk factor is from hazardous exposures that can lead to cancer and severe illness in later life. Over 5000 such cases are reported a year.


The manufacturing industry only accounts for 10% of the total workforce but has around 31 fatalities a year. This is a vast improvement from over 20 years ago, with average fatalities reaching the hundreds.

Exposures in the manufacturing sector also accounts for nearly 2000 occupational cancer cases a year.

Miners & rig workers

Safety has improved greatly over recent years but that has still not eradicated the risk for miners or rig workers. This still remains one of the riskiest professions out there.

There are a number of hazards that make miners a high-risk profession. Those include risk of roof cave-ins, flooding, explosions & fires. The other main concern when working down a mine is the lack of ventilation and the mining dust can cause damage to lungs many years later.

Offshore rig workers have one of the largest risks of all, due to extreme weather, remote location of the rig & the heavy machinery involved.

Other risky professions

The other risky jobs out there include; circus acts, dangerous sports such a motor racing drivers. Other professions such as journalists, cameramen & private security guards can be exceptionally dangerous, especially if reporting within war zones etc.