Public Liability Insurance: a guide
What is public liability insurance?
Public liability insurance is designed to protect your business in the event that a member of the public is injured, or if their property is damaged, either while they are at your business premises or while you are in their home or workplace.
Even a simple, non-serious accident - such as a customer tripping over a trailing cable in your shop and breaking their ankle - could lead to financial claims big enough to bankrupt you.
If your business were deemed liable for an incident like this, it’s likely you’d have to pay compensation for the distress and inconvenience experienced by the person who was injured, as well as cover legal costs.
It’s even possible you could be pursued by the NHS to cover the cost of medical treatment received by the individual who was hurt.
All in all, you could face a bill for many thousands of pounds - potentially enough to put a small firm out of business.
Do I need public liability insurance?
Unlike employers’ liability insurance, public liability insurance is not a legal requirement. However, it is considered an essential among business owners, and in some professions you may find it impossible to trade without it.
For example, clients may stipulate that you must have a minimum level of public liability insurance in place before you can work for them. If you wish to undertake public sector contract work, you will almost certainly need public liability cover.
Whether you’re a nanny, a professional musician, a DJ or even rent out bouncy castles for a living, there are good reasons for you to consider purchasing public liability insurance cover.
What does public liability insurance usually cover?
Public liability insurance usually provides cover for:
- Compensation claims for injuries to a third party or damage to their property, whether an incident takes place on your business premises, a customer’s premises or elsewhere
- Legal expenses
- The cost of repairing damage (for example, to a client’s carpets if you are a plumber and do something in the course of your work which causes a flood)
- The cost of hospital treatment (including the cost of calling out an ambulance), if the NHS chooses to claim against you
- Any other expenses deemed reasonable.
It’s up to you to decide how much public liability cover you need to put in place, depending on the nature of your business and how much it is worth.
Many public liability insurance policies offer cover from £1m to £10m for small and medium-sized enterprises.
What is unlikely to be covered under a public liability insurance policy?
First and foremost, it’s important to note that the complete cost of any claim you need to make under public liability cover is unlikely to be met by your insurer. You are likely to have to pay an excess at a level agreed when you first set up your policy - for example, the first £250 or £500 of any claim.
As a general rule of thumb, if you opt for a higher excess the price of your public liability insurance premium may come down - but it’s important to be sure you could genuinely afford to pay the excess in the event of a crisis.
Public liability insurance won’t cover accidents that happen to you, damage to your own property or accidents that affect your employees or their possessions. Incidents like these should be covered under your general business insurance policy and / or your employers’ liability insurance policy.
Unlike public liability insurance, employers’ liability insurance is a legal requirement in almost all cases where someone works for you, so make sure you know the rules and follow them fully where relevant – otherwise you could face legal action and a hefty fine.
How can I compare public liability insurance deals?
As with any form of insurance, it’s important to compare a variety of public liability insurance policies from different providers before buying. Check the levels of protection on offer as well as the annual premiums, and consider carefully where you should set your excess.
MoneySuperMarket’s public liability insurance comparison channel will help you gather a selection of quotes within minutes, to help you find the best deal for you.
Find and compare a public liability insurance policy for your business
Whether you are self-employed, own a small business, or have a larger business with a number of employees, we can help you to find public liability cover and a comprehensive business insurance policy to meet your individual requirements.
To find out more about business insurance and public liability cover for your business type or profession, please click on one of the links below.
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