Why Do I Need Public Liability Insurance?

Whether you work from home as a sole trader, own a small business, or have a large company with many employees, you need to make sure that you are protected against claims brought against you by those who visit your premises.

That’s where public liability insurance comes in; this insurance is important to have for any business as it offers a level of protection against potential problems, such as trips and falls which could lead to injury or damage to equipment while on your premises.

What Is Public Liability Insurance?

Public liability insurance covers you against claims made by members of the public or clients who have suffered personal injury or property damage as a result of visiting your premises.

Public liability helps your business cover compensation costs brought against you by third parties and clients.

Example 1: Client

You have a potential client visiting your premises, and they have brought their own equipment with them. While at your office, they trip over a loose network cable and fell, and dropped their laptop in the process, the impact of which leaves the equipment broken and unusable.

If the client were then to put in a claim against you for the cost of repairing their equipment due to negligence on your part, public liability insurance would help to cover the cost of replacements or legal fees.

Example 2: Contractor

You have hired a plumber to carry out work at your premises, and because of negligence in their work – such as a loose valve – it led to your property sustaining water damage and loss of equipment. The contractor would have to have public liability insurance to cover them should you make a claim against them.

What Is Employer’s Liability Insurance?

Aside from public liability insurance, business owners are also advised to take out what is known as Employers’ Liability Insurance. While public liability insurance helps to cover customers and clients, employers’ liability helps protect you against claims made by your own employees in the event of injuries sustained while working for you.

Do I Need Public Liability Insurance By Law?

While public liability insurance is not a compulsory insurance for businesses to have, if you interact with members of the public or have clients visiting your premises daily, you will need to make sure they are covered against any unexpected circumstances.

Having public liability cover can help give your business peace of mind, for you will be covered in the event of a tragedy. Take a look at our in-depth guide on Who Needs A Public Liability Insurance for more information.

How Much Can I Cover For?

Public liability policies can range from around £1m up to £5m, and depending on the insurer you go with, you will usually have a choice as to how much cover you want to insure yourself – which will depend on your business area and the size of your company.

Can My Business Apply For PL Insurance?

Public liability insurance can be taken out by any business from a sole trader or independent, all the way up to a large corporation. PL insurance is essential for those businesses that are customer-facing or those who welcome clients into their premises to do business.

By making sure you are covered against any potential accidents or property damage sustained by your customers and visitors, you can save money and hassle in the event of a claim.

How Can I Arrange Cover?

Work out how much you can afford for some public liability insurance, then seek out and speak to a specialist broker who deals with public liability insurance. Depending on the size of your business, you can negotiate levels of excess and the level of cover you’ll need.

What Will This Cover?

Your PL insurance policy will cover aspects such as:

  • Personal injury sustained by customers and clients on your premises
  • Damage to property as a result of negligence on your premises
  • Hospital and medical bills incurred as a result of an injury or incident at your premises
  • Damage to property as a result of poor workmanship by your staff

While public liability insurance is not mandatory, it can be useful to have to cover your business against unfortunate incidents. It’s better to be safe than sorry in this case, so taking out some PL insurance can be a wise investment which can offer a level of protection for the future of your business.

Who Needs A Public Liability Insurance?

If you own a business, protection is paramount, and we’re not just talking about the locks on the doors or the security system you use for surveillance. People will need to be protected as well, both the staff you employ and the customers who come through the door and keep your business, in business.

What is Public Liability Insurance?

Public liability insurance helps protect your business against claims brought against it by third parties. This can involve those who have suffered personal injury or damage to their property due to your neglect or as a result of a mishap on your premises – usually a slip, trip or fall – which can be costly to your business if you’ve not taken precautions.

Who can bring a claim against me?

Customers who have suffered an injury while on your premises, either due to a mistake by one of your staff or as a result of a trip or fall caused by a wet or poorly maintained floor.

Another example could be if a visitor to your site; a salesperson or contractor we’ll say, suffers injury or damage to property due to a trip caused by loose wires or cracks on the floor, which then leads to damage to their person or to the equipment they might be carrying.

In these cases, public liability insurance can help protect your business against costly claims. Depending on the incident, you’re likely to be chased for compensation to cover medical costs or damage to equipment, so it’s worth making sure you are covered.

What protection does it offer?

Public liability insurance will provide cover for a range of different costs brought forward as a result of claims, these can include:

  • Legal expenses
  • Costs of repairs as a result of flood damage caused by your negligence – for example causing damage to a clients’ property or possessions as a result of a mistake during your duties, which may lead to water damage.
  • Costs of compensation brought against you by a third-party for injuries sustained or for damage to property. This can cover your premises, a customer site, or many others.
  • Hospital treatment costs brought against you by the NHS to provide treatment.
  • Other expenses that are deemed reasonable to claim

Is there anything that’s not covered by the policy?

Public liability insurance does not offer the insurer any personal protection, against damage to their own property nor any claims brought against them by their staff members Such claims will be covered by employers liability insurance and general business insurance policies.

Does my business need it?

Public liability insurance is not a legal requirement for your business, unlike employers’ liability insurance, which offers protection against claims brought against you by staff members who may become ill or injure themselves while working for you.

No matter what your business, if your work involves members of the public – whether it’s providing a service or simply performing at an event – public liability insurance can be useful since it would protect you should anything happen during your period of business.

In some cases, it is better to over-insure your business to further protect yourself against future incidents than to leave yourself short in the event of multiple claims.

RELATED: Why Do I Need Public Liability Insurance?

How much will it cost me to cover my business?

There is a wide network of brokers who offer public liability insurance policies of varying degrees of cover to suit your business. Talk to your insurer and discuss in detail what type of cover you want for your business.

All these insurances, which one does my business need?

It can be worth having all three of the insurances mentioned in this guide against your business to ensure all your bases are covered in the event of a claim. Be aware that, while your policy may come down depending on how high an excess you want to set, you must ensure you can cover the cost of the excess should you need to claim.

Our Tips:

  • Public liability insurance covers you against claims made by third- parties.
  • Unlike employers’ liability insurance, public liability insurance is not a legal requirement.
  • You decide how much excess to put against a policy, setting it higher could mean a cheaper premium.