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Public liability insurance

What is public liability insurance?

This type of insurance helps business owners foot the bill for legal claims made against them

By Kevin Pratt

Published: 03 March 2020


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Public liability insurance is an insurance product for business owners. It protects you in case your business is brought to court by a client, a customer or a member of the public. If your business is sued, public liability insurance will cover the cost of your legal defence, plus any compensation or settlement money you have to pay out.

If someone is injured while on your business premises or as a result of your business activities, the NHS might claim the costs of medical treatment and transportation from you. In these cases, public liability insurance should also be able to cover your costs.

Public liability doesn’t cover any injury to yourself or your employees. It also doesn’t protect you if you’re sued by an employee – that’s covered by employers’ liability insurance, which is a legal requirement if your business employs more than one other person.

It covers the cost of legal action and compensation claims made against your business if a third party is injured or their property suffers damage while at your business premises or when you are working in their home, office or business property. 
This also includes the cost of medical treatment and transportation costs incurred by the NHS should they claim this amount from your business following an accident.

Do I need public liability insurance?

You’re not legally required to have public liability insurance, but if you’re a business owner the chances are you’ll need it. Public liability insurance covers your costs if someone else sues your business – and without cover, unexpected legal costs could bankrupt your business.

Public liability insurance is particularly important if your business involves interacting with the public – for instance, you could own a barber’s shop, a grocery or a café. If a customer has an accident on your premises, they might sue. Public liability cover makes sure you won’t be left with the bill.

You may still need public liability insurance if your business doesn’t have a physical premises. If you’re a consultant, you could accidentally damage a client’s property while visiting them. Even if you sell products from home, there’s always a chance that a customer could bring you to court.

In some cases, your clients might insist you have public liability cover before they hire you. For instance, if you’re a live performer, venues might require you to be insured before they’ll let you use their space.

How much public liability cover do I need?

The level of public liability insurance you need will depend on your business. If your business poses a low level of risk – for instance, if you work from home rather than interacting with the public – you’ll probably need a lower amount of protection. However, if your chances of being sued are higher, you should probably buy more cover for your business.

Most insurers offer public liability cover starting at around £1 million, but you can often buy insurance for up to £10 million or more. It’s worth finding out what the usual standards are for the industry that your business operates in. Bigger businesses will often need more cover, but these can be good guidelines when it comes to getting insured.

What happens if I don’t have public liability insurance?

There’s no legal penalty if you’re uninsured – but you might regret it. If someone sues your business and you don’t have public liability insurance, you’ll have to pay for a solicitor yourself. If the claim against you is successful, you might have to pay a hefty settlement – and you might even have to cover the legal fees for the person suing you.

Even if you win the case, you could still be left with heavy legal costs, which can mount up quickly. It’s possible to claim back some of these expenses from the person who sued you, but they’re very rarely paid in full.

What’s not included in public liability insurance?

Public liability insurance doesn’t cover any injury to you or your employees, or damage to your property. This should be covered by your general business insurance. It also doesn’t cover you if your business is sued by an employee – that comes under employers’ liability insurance, which you’re required by law to have if you employ more than one person.

Your public liability insurance won’t cover all costs. All policies have an excess – that’s the amount you have to pay yourself towards any claim. So, for instance, if you cause damage worth £5,000 and you have an excess of £250, your insurer will pay out £4,750 when you make your claim.

Where do your public liability quotes come from?

To help bring you some of the best public liability insurance on the market, MoneySuperMarket has teamed up with Simply Business, one of the UK’s leading business insurance brokers. We compare quotes from some of the top insurance brands in the country so you can make sure you’re always getting the best deal on your public liability insurance.

How do I find business liability insurance?

To find a great deal on business liability insurance, use MoneySuperMarket’s price comparison tool. Simply give us a few details about yourself and your business, and we’ll do the rest. We’ll find some of the best quotes on the market in minutes, and you can compare your options to find the right deal for you.

Ready to save on your business insurance? Or need to know more before you get a quote? We’re here to help.

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