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Who needs public liability insurance?

Who needs public liability insurance?

Unlike employer’s liability insurance, public liability insurance isn’t a legal requirement. That said, it’s an important cover for any business that interacts with the public. After all, most businesses have some contact with customers, suppliers or passers-by, meaning they’re exposed to a degree of risk.

By Kevin Pratt

Published: 25 May 2016

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Public liability insurance is there to protect you if someone is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you at your business premises and also when you’re working at client sites or in public.

Risk exposure

This means public liability insurance is particularly important for businesses such shops, cafés, hairdressers and builders, as all these trades have a high level of exposure to the public.

For example if you run a hairdressing salon and a customer is burnt by hair straighteners that have been left switched on, or if you run a café and a supplier is injured when they slip on a wet floor, your public liability insurance can cover the legal fees and compensation costs if your business is sued.

The compensation amount can take into account things such as the injured party’s repair or replacement costs, medical fees and lost income, so it can be very high. Most insurers will offer £1 million of cover up to £10 million, depending on the level of public liability insurance your business needs. 

Proof of cover

Clients may also ask for evidence of your public liability policy before they’ll work with you, and their contracts may require you to hold a particular level of cover.

Government and local authority contracts in particular usually specify a certain level of public liability cover.

You should therefore take into account both the risks your business faces and the expectations of your clients when you’re deciding whether you need public liability insurance, and how much cover you need.

If you can think of a possible scenario in which a member of the public could sue your business, it’s definitely a cover worth having.


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