Summer Festivals & The Need For Public Liability Coverage

Organising a large scale event or festival involves a lot of moving parts. The scale of a festival can mean thousands of people gathering in the same place, which can in turn be a recipe for disaster should an accident occur. In order to protect yourself from a lawsuit resulting from an injury or property damage to a third party, it is critical that you purchase public liability insurance for festivals.

What Public Liability Insurance Covers

Public liability insurance will cover the cost of defending a claim, as well as any medical bills and treatment resulting from an injury. Given the litigious nature of society and the high cost of medical bills, this figure can quickly escalate to a point where it will threaten your business and your livelihood. If you have public liability insurance, however, the following aspects are covered:

  • All legal expenses and fees
  • Hospital treatment, ambulance rides, and claims made by the NHS
  • Property damage suffered by a third party

There are, however, some exclusions that public liability will not cover. Any employees that are working the festival, for instance, must be covered by employers’ liability insurance. This can often be bundled together with your public liability policy for more favourable rates. Another common exclusion applies to the use of hazardous materials. Most liability insurance policies will not cover a festival that employs fireworks or other tools that are commonly associated with negligence claims.

Festival and Concert Cover

Often times, festivals are brief enough that long term insurance is not necessary. Most insurers will be flexible enough to provide insurance for events as short as a day, as well as annual rates.

There are a number of ways a person can get injured in any business type, from spills to falls. However, with a festival, the sheer abundance of people can only exacerbate this risk, often times with the organiser being found liable. For example, if adequate space was not provided for people to walk, or escape routes were not provided in the event of a fire, it may prove to be a case of negligence on the festival management. If there was an episode of trampling and the organisers were found to have sold more tickets than was sustainable, it could also result in a lawsuit.

Public Liability Insurance Costs and Limits

Generally, the higher the risk, the higher your premiums. The public liability risk involved in putting on a festival or concert is immense, as it encourages attendance and participation from the general public. This also means, however, that the need for insurance is imperative. Depending on the length of the coverage and your level risk, there are various limits offered, from £1 million to £10 million.

It is a good idea to consult with an ABI licenced broker regarding what options would be best for you. While for the most part rates are similar to that received by other festival organisers, there are plenty of factors that may be unique to your situation that could lead to more extensive discounts. Consulting with a broker will provide you a better idea of what cover you need for your particular situation.

Don’t Let Employers’ Liability Insurance Confuse You

Most employers in the UK are legally required to insure their employees against liability for property damage and injuries that occur during employment. Employers’ Liability insurance is designed to protect your business in the event of such a claim.

What is Employers’ Liability Insurance?

Generally speaking, employers are responsible for the health and safety of their workers. As such, if an employee is injured, made ill, or incurs damage to their personal property as a result of the employer’s negligence, they are entitled to pursue a claim against the business.

The Employers’ Liability Act of 1969 makes purchasing insurance mandatory for any business in the UK that has employees, provided the employees are based in England, Scotland, or Wales. This is true for both on and off site incidents, although accidents that occur in motor vehicles may be covered by your car insurance.

How Much Cover Do I Need?

All businesses must be insured for a minimum of £5 million, with larger amounts available for companies that assume more risk. Some policy providers offer varying amounts depending on the type of claim, such as £10 million for general claims and £5 million for rarer incidents like acts of terrorism. Cover will generally include:

  • Indemnity for legal fees – Employers’ Liability Insurance will handle the cost of fighting the claim and paying for all fees associated with the lawsuit, including any criminal prosecutions for offences relating to the Health & Safety at Work Act of 1974.
  • Medical fees including ambulance rides and payments to the NHS

It should be noted that some businesses are exempt from the law, such as public organisations, government agencies, local and police authorities and nationalised industries, National Health Service trusts, some publicly funded trusts and family businesses, although not all may fall under the exemption.

Who Does the Insurance Cover?

Part-time or contracted workers may be covered by your employers’ insurance plan. Typically, the insurance applies if you deduct income tax and national insurance from their compensation. You may not need to provide cover if your employees fall under any of the following categories:

  • Independent contractors who do not work exclusively for you
  • Employees who can employ a substitute if they are unable to work
  • You do not deduct national insurance or income tax from their pay
  • The employee works for their own personal benefit
  • Volunteers
  • Students on a work experience or unpaid internship program

However, given that accidents can occur regardless of their employment status, for these individuals, a separate cover called public liability insurance may be required.

What Happens If I Don’t Have Employers’ Liability Insurance?

The Health and Safety Executive (HSE) can send an inspector to verify if you have a policy of at least £5 million. An employer can be fined up to £2500 for any and all days they are without proper cover. Furthermore, failure to display a certificate of insurance, either with a physical copy or online, can result in fines up to £1000.

What Are the Costs?

The cost of employers’ liability insurance is largely dependent on the amount of risk associated with your business type. However, that risk will fluctuate based on your previous claims history, the amount of your excess, and changes in the market. Be sure to go over with your broker the various ways you can lower your premium and still remain covered for the areas that present the largest risk.

So, What Do You Really Know About Public Liability Insurance?

Whether you are an established business or a fresh start-up, it is important to protect your company from the threat of litigation. Accidents involving a customer can happen in seconds but damage a business reputation and solvency for decades to come. Given that no business can prepare for every contingency, having an insurance plan as a safety net will not only protect your business but offer you peace of mind.

What is Public Liability Insurance?

Public liability insurance is designed to protect you from lawsuits brought about by a third party. The insurance covers both injury to the party and any damages to their property. Typically, when such a claim is issued, the insurance company will cover the cost of fighting the lawsuit as well as any compensation that results from the litigation. This includes:

  • Medical bills, ambulance rides, and payments owed to the NHS
  • Legal fees and other expenses associated with fighting the claim
  • All miscellaneous expenditures resulting from the lawsuit

Why Do I Need Public Liability Insurance?

Any business that deals with clients, business partners or members of the public will need some form of public liability insurance. For example, if a customer were to walk into your place of business and slip on an unmarked wet spot, they are entitled to sue you for any damages that result from the fall.

Conversely, if you are a contractor who goes to businesses or places of residences, you could be responsible for any damages you incur while on the job. For instance, a spilled drink on a server could result in extended downtime that costs a business not only the cost of equipment, but millions of pounds in lost revenue. As it is impossible for a small business or independent contractor to compensate the aggrieved for such damages, an insurance plan is necessary.

What Level of Public Liability Cover is Required?

Generally, the minimum level of cover you can opt for is £1 million. However, this may not be enough for certain business types. Depending on your overall level of risk, you can purchase plans for up to £5 million or £10 million.

What Doesn’t Public Liability Insurance Cover?

Public liability does not cover injuries to employees or damage to their property. A separate insurance called Employers’ Liability Insurance is required for this. Most policy providers will offer both as a bundled package for additional discounts.

Some other details to be aware of when choosing a policy include:

  • Is the business covered for the most common risks? Is there a chance you could exceed the limit?
  • What are the exclusions on the policy? Often times cheaper quotes are cheap due to provisions that do not supply coverage for certain accidents.
  • What level of cover do your clients demand? Public liability insurance can also be used as a way to legitimise your business and as a selling point to clients who may have some trepidation about your business.

Discounts and Other Cost Reducing Techniques

While public liability is generally inexpensive, some higher risk business may face larger premiums. To help reduce costs, it is important to look for insurance providers that offer flexible plans and pricing. Some risks that are common to your business type may not be applicable to your company. In other instances, having a good no claims history can result in significant discounts. You can also hold safety courses and make additional steps to lower your risk in the eyes of the insurer.

Why is Public Liability Insurance a Good Thing?

While public liability is not a requirement for all businesses, failing to purchase a policy can result in a single incident jeopardising your livelihood. No matter what precautionary measures you put in place, there is always the risk of an accident happening. Having a safety net can give you peace of mind, knowing that even if the worst were to happen, your customers’ possession can be replaced, their property repaired, and their medical costs covered.