Public Liability Insurance

Public liability insurance is a must have insurance policy that protects small or large businesses. This indemnity insurance protects your business against compensation claims, for causing accidental damage to property or physical injuries to members of the public. The claim could happen at your premises or as a result of contracted work at your customers premises.

The benefit of buying  liability insurance

For example while cleaning the floor of your business premises your employee leaves cables trailing across floors, creating slip and trip hazards. Later on the cables trip a visitor who falls and breaks a leg / arm. Your employee should have been trained in how to complete the job without creating slip and trip hazards. Furthermore, you should have ensured that the cleaning is done in a manner that protects the public. By failing to do so, the injured person can make a slip injury compensation claim against you.
Having bought a public liability insurance policy your business will be covered against the cost of any legal fees, medical bills, loss of earnings, compensation award for pain and suffering that the injured person brings against you. The total bill could run into tens of thousands of pounds and on this occasion your policy insurer will pick up the tab. However, without the benefit of an indemnity insurance policy, can you bear the thought of having to pay such amounts from your own pocket!

What limit of cover do I need

There are two important factors to bear in mind when buying liability indemnity cover. They are the size of your company and the nature of its business. Generally speaking you have a choice of  £1, £2, £5 or £10 Million indemnity limits.
It is worth noting that whilst a coverage limit of £1 million may suffice for a sole trader with a carpentry business, it is unlikely that such a policy would prove adequate for a large construction company that builds skyscrapers. Naturally, an insurance company will charge the larger business concern, with larger coverage limits, a great deal more for the insurance than it would the individual with the carpentry business.
Sometimes, your contract stipulates the limit of indemnity cover that you need to have. For example local authorities in their terms and conditions require you to have an indemnity limit of at least £5 million.

Public liability insurance, who needs it?

Practically every business in the UK needs it, as it protects them, irrespective of size, against compensation claims that are brought against them by a person, for injuries suffered or for property damages as a result of an action carried out by the business and / or its employees.

It is impossible to name absolutely every type of scenario that is covered by a public liability insurance policy, but the major categories that come under the umbrella of public liability insurance include bodily injuries, damage to property and loss of property. The policy also provides cover for any third party property damage that might occur as a result of the work that a business carries out. This sounds a little complex, but all it basically means is that if the property of an associate of a customer gets damaged, for instance the car of a neighbour during house repairs, then this damage will be covered by the public liability insurance policy.

Please note that even though you are working from your own home and you might get the odd visitor you must ensure that your insurers know about this and that they extend your house insurance policy to cover your visitors. Children toys, loose carpet are some of the hazards that you can’t foresee  and they may trip your visitor who sustains an injury. Your visitor will make a claim against you for injuries and loss of earnings.

Personal injury legal fees, medical bills and compensation awards can run into tens of thousands of pounds and without the benefit of an indemnity insurance policy have to pay them from your own pocket.

Choosing the right cover

Depending on the work you undertake the cover should reflect the risks involved. If you dig the ground then you need to consider the depth at which you work, up to 3 meters or deeper. What sort of assets will you be unearthing and the costs involved in putting things right. The heights at which you work 10 meters or above. Then the value of the work undertaken and the value of the surrounding properties or assets that can be accidentally damaged. Work that requires the use of a naked flame, working in hazardous environments or next to aeroplanes or trains. All these will require higher limits of cover as opposed to office based work or visiting offices with no manual work performed when a lower limit can be considered. Again you need to carefully check the limits required in your contract.

Who is not covered by Liability insurance.

Liability insurance is not an insurance policy that compensates you for an accident that injures you or any of your employees. To cover yourself against this contingency you need an accident and sickness insurance policy. Whereas, for your employees you are required by law to take out an employer’s liability insurance policy. Some insurance policies do not cover family members if they are employed by your firm. If applicable to you please check this cover restriction with any potential policy provider.

Material facts affecting the insurance cover and premium

The annual premium takes into account the risk you present to the insurer, the number of your employees, your wage bill, turnover, the level of indemnity cover required and your claims history.

Standard / Basic Cover
A choice of  public liability insurance limits of –   £1,  £2,  £5 or £10 Million.

Optional additional covers you can add

• Tools
• Stock
• Contract works
• Product Liability
• Business premises
• Business equipment
• Employers’ Liability
• Professional Liability
• Business interruption
• Legal expenses insurance

Further information

If you require further information please check our online guide for definitions and frequently asked questions. However, if you prefer to talk to someone then please either use the request a Call Back form or call us on 0121 628 9494 and a member of our professional team will be more than happy to help you. You can also email us at info@publicliabilityinsurance.co.uk. We are here to help find the right policy for you.

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