Public Liability

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.