The recent oil spill in the Gulf of Mexico has certainly raised the awareness of the need for liability insurance. The cost of the spill is still unknown but is certainly going to stretch into the billions of US dollars.
Obviously in most businesses, the amount of risk is very unlikely to get anywhere nearer the cost of this incident but it is an eye opener as to the unexpected things that can happen. Some people think that £1 million cover is more than enough but you just never know how much injury or damage you could end up causing.
I’m sure BP probably thought that £1 billion cover should be enough to cover any event but we can see this wasn’t the case. I don’t know anything about BP’s insurance protection but an event of this magnitude was certainly unforeseen.
This is the whole purpose of liability insurance, to protect against the unforeseen. You should always obtain more cover than you think you need otherwise we are putting ourselves at risk of footing a rather large bill.