Any visitor to your business premises, whether they are an electrician, a courier, a customer or a member of the general public, can make a claim against you if they are injured or their property is damaged as a result of your business activities.
It is therefore the responsibility of the business owner to make sure that any claim for compensation from a third party is met. Public liability insurance enables you to do this (up to certain limits).
What is public liability insurance?
Public liability insurance is there to protect your business from claims from an injured third party or someone whose property has been damaged as a result of your business activities.
The insurance is designed to pay out compensation for claims made which could include loss of earnings, future loss of earnings, damages awarded to a claimant plus any legal expenses that you could incur if you are found to be at fault.
Is public liability insurance compulsory?
Public liability insurance is not always compulsory but it’s good practice to have the right cover in place to protect yourself and your business against compensation claims should an accident happen.
How much cover will I need?
When deciding how much public liability insurance you need, think about whether your business is in a ‘high risk’ industry. These include, amongst others, working as a tradesman at power stations or as a contractor on motorways or railways. You also need to consider your customer’s minimum requirements. Local authorities, such as borough and city councils, may stipulate a minimum cover requirement of £5m.