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 a legal requirement?
In short no, but whilst you’re not required by law to take out public liability insurance, it is highly recommended in order to protect your business against claims made against you by third parties. Working in the public domain exposes you to certain risks, from damage to third party property to injuries sustained by them. Public liability insurance can protect you and your business financially should something unexpected 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.
How much is public liability insurance?
The cost of public liability insurance varies depending on a number of factors, i.e. your trade, business activities, place of work or number of visitors to your premises. It is also affected by the limit of cover you require, normally referred to as the limit of indemnity. The limits are usually fixed at £1m, £2m or £5m, alternative limits are available, and the premium will typically increase as the limit is increased.
What businesses take out public liability insurance?
Public liability insurance is highly recommended for any business type. Below is a list of some trades that typically include public liability cover as part of a packaged business insurance product: