You should consider taking out public liability insurance if members of the public visit you at your place of work, or you perform work at places of work owned by third parties. It will protect you in the event that you cause an injury to a member of the public, or property belonging to another business or individual.
Public liability insurance – what does it cover?
A PL 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.
PL 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 further information.
Examples of Public liability insurance claims
By way of illustration, here are some classic scenarios where PL insurance will protect your business:
1. A self employed PC support worker visits a client site to mend some equipment. Accidently, he spills coffee on so 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?
In some cases, you may be contractually required to take out a certain amount of cover (e.g. if you do work for a local authority, or are an IT consultant). Otherwise, cover tends to start at the £1m mark, and can be purchased in increments up to £5m or £10m.
You will typically find that most insurers will offer PI insurance in a bundle with Employers’ Liability Cover, as they are commonly purchased together. You may find that you can save money buy purchasing a general small business insurance policy rather than each component separately.
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This information is provided as an overview, it has no legal status. Please check all policy details carefully before taking out insurance for your business.