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Accidents happen. There’s no getting round it. Nor the fact that they can bring crippling claims against your business if you cause personal injury or property damage to someone else. To eliminate this kind of risk, businesses buy third-party liability insurance – all-weather umbrella cover that can protect organisations from the financial storm if the worst should ever happen.
Read on to learn more about third-party insurance and how it can take the sting out of any claim.
There are two types of third-party insurance:
Third-party insurance protects the insured from potentially catastrophic compensation claims for any personal injury or property damage they have caused to another person, business, or organisation. Without third-party insurance, you could end up paying extremely high damages to someone you have injured, or for the repairs or replacement of their property, whether or not the harm was intentional.
There are three parties in third-party insurance:
It depends on who is making the claim. If you’re the insured (the first-party), and you suffer loss – for example, someone smashes your shop window but they are never identified – and you make a claim on your business insurance, you are making a first-party claim. Alternatively, if you or your business causes injury or property damage to someone else (the third-party) and they make a compensation claim against your liability insurance, they are making a third-party claim. So:
Third-party liability insurance can cover the cost of legal expenses and compensation costs if someone sues your business for injury or damage.
For example, you run a window-cleaning business and someone trips over one of your ladders and suffers injury, or your delivery van accidentally scrapes a customer’s car that’s parked on your forecourt. In these kind of situations, the person who has suffered injury or damage (the ‘third-party’) could claim compensation from you. The claim can include things like medical bills, lost income, legal fees, and replacement or repair costs. (If your public liability insurance covers it, your own legal expenses will usually be paid by your insurer).
Third-party insurance can start from as little as £3 per month, but the premium you pay will depend on your business type, where you operate, your business risk profile, the excess you agree to pay and any optional extras you choose to buy.
All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let a simple accident or error become a catastrophe for your business. Contact Swoop today to compare top-quality third-party liability insurance from different providers and to discuss all your business insurance needs.
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