Public Liability Insurance: a guide
What is public liability insurance?
If you own or run a business of any size, you should take out public liability insurance.
It protects you and your business should anyone make a claim against you for accidental injury or damage to individuals or property, either at your premises or as a result of your business activities.
How does public liability insurance work?
Imagine you are the owner of a small shop. One of your employees plugs in a vacuum cleaner and runs the cable along the floor, over to the carpet in the corner.
A customer walks into the shop, trips over the cable and breaks their ankle. He or she would have the right to sue you because the accident was due to your business activities and/or negligence on the employee’s behalf.
An accident of this kind could result in a very expensive claim: up to tens of thousands of pounds. However, as long as you have adequate public liability insurance in place, your insurer will cover any legal fees, NHS medical costs and compensation that need paying.
What does public liability insurance cover?
Public liability insurance is designed to protect you in the event of accidents involving you clients and their property – as well as other individuals and property affected by your business activities.
This includes fatal accidents. It does not, however, cover accidents that happen to you, your own property or any employees. Instead, these are covered by your overarching business insurance policy.
If you have one or more employees, you are required by law to have employers' liability insurance (although this may not apply if you only employ members of your family).
How much cover do I need?
Most insurers offer public liability insurance from £1million.
That may sound like a lot of cover. But if you work in a high-risk industry, you may actually require a lot more than that to protect you properly.
Businesses that are considered high risk by insurers include shops and theatres that are visited by a significant number of members of the public – often referred to as third party individuals.
Other businesses that need a higher level of cover include those working with chemicals and powerful machinery or occupying premises where alcohol is consumed.
You may also find that some of your commercial contracts stipulate a minimum level of public liability insurance.
This is especially common when working with local authorities, most of which require cover of at least £5 million.
Public liability cover for small to medium enterprises (SMEs) usually has a maximum limit of £10million.
Who needs public liability insurance?
Businesses most at risk from public liability claims are those who have visiting clients or suppliers, even if the business is run from home.
If you will be working at a customer's property or premises, you will also be liable for any damage or injury arising as a result of your work for them.
So while having a public liability policy in place is not a legal requirement, taking out public liability insurance is a sensible move if you own a shop, pub or office, for example, or work in a trade that requires you to enter a customer's premises.
And whatever type of business you own, taking out public liability insurance could save you from going under due to the legal costs and compensation payments arising from an accident.
For more information about a business insurance policy specifically tailored for tradesmen, check out our tradesman insurance page.
For more details of public liability insurance for self employed workers, meanwhile, try our public liability insurance self-employed page.
How much is public liability insurance?
Public liability insurance costs depend on several factors. The insurer will look at the the size of your business and the type of work you do, gauge the level of risk you present and determine the amount of cover you require – and how much premium to charge.
The premium will be much lower for a small business owner working from home with few visits from clients, than for a plumber who regularly enters the home of their clients and carries out repairs.
How do I take out public liability insurance?
It is easy to find cheap public liability insurance with MoneySuperMarket.
Simply enter your business details, and we will scour the market for the best deals – including any extras you need, such as public liability insurance for events.
Each public liability insurance quote is specifically tailored to you and your circumstances, allowing you to quickly and easily compare public liability insurance policies.
If you have any further questions, you can also call our helpful team on 0333-123-0793. Your call will be answered by our public liability insurance partner, Simply Business.
To find out more about public liability insurance, including the answers to a range of frequently asked questions, please visit the pages below.