Public liability insurance will protect your business if you cause an injury to a member of the public, or property belonging to another business or individual.
You should consider taking out public liability insurance if members of the public visit you at your place of work, or if you perform work at places of work owned by third parties.
Public liability insurance – what does it cover?
A public liability insurance policy will protect your business from claims made by third parties for injuries to the person, or damage to property caused as a result of your business activities.
A typical policy will pay for the cost of putting right any damage, or medical fees in the case of injuries. It will also cover the potentially crippling costs of legally representing your business, related expenses, and any damages your business is found to owe in relation to a claim.
Public liability insurance does not cover claims made by any of your employees. To protect your business from this type of eventuality, read our guide to employers liability insurance for small businesses. You are legally required to have this cover in place if you employ anyone, and the penalties for failing to comply are severe.
Examples of public liability insurance claims
By way of illustration, here are some classic scenarios where public liability cover will protect your business:
1. A self-employed PC support worker visits a client site to mend some equipment. He accidentally spills coffee on the client’s main server and causes some permanent damage.
2. An electrician re-wires a building as part of a general refurbishment. He doesn’t fit the fuse box correctly, resulting in several circuits getting burnt out.
3. You own a pet shop. One of your customers trips over some boxes of stock you carelessly left in an aisle. The policy will cover the costs of treating the injury caused to the customer.
How much cover do you need?
Cover tends to start at the £1 million mark, and can be purchased in increments up to £5m or £10m.
In some cases, you may be contractually required to take out a certain amount of cover, for example, if you do work for a local authority, or are an IT consultant. Otherwise, it is up to you to choose the level of cover you think is sensible for your business.
You will find that many insurers will offer public liability in a bundle with employers’ liability and professional indemnity insurance as they are commonly purchased together.
You may find that you can save money by purchasing a bundled insurance policy rather than each component separately.
Other types of business insurance
The following guides explain other types of business insurance;