Public Liability Insurance
Public liability insurance is one of the most common types of commercial insurance that UK businesses and self-employed people take out. It provides essential protection in case you are sued for causing injury to a customer, or member of the public, or for damaging their property.
What is public liability insurance?
Public liability insurance is a type of commercial insurance, which is designed to pay compensation and legal costs if your business is successfully sued by a member of the public for personal injury, or for damage done to property. It covers your legal liability to pay damages, subject to terms and conditions. The insurance will also cover you for any legal costs associated with defending such claims against your business.
Is public liability insurance compulsory?
There is no legal obligation for businesses to have public liability insurance (with the exception of horse riding businesses) but it should be high on your list of priorities if you run a business that deals with the public and want to protect your assets.
Businesses with a high public liability risk have premises which are visited by large numbers of people such as shops, markets, pubs, clubs, hotels, theatres, sports venues and holiday resorts.
Often, potential customers will only deal with companies that have suitable public liability insurance in place.
If you have employees, and need employers liability, then you will usually have to buy public liability insurance at the same time.
How much does public liability insurance cost?
The cost of public liability insurance depends on a variety of factors including the type of business you operate and whether or not you work away from the premises. It also depends on the size of your business, the limit of cover and if you have any previous or outstanding claims. Insurers will want to know if you use heat or work at height or below the ground.
Contractors, such as roofers and groundworkers will be rated differently, for public liability, than an office-based business or a restaurant.
What is a public liability certificate?
Because public liability is, in most cases, not compulsory, insurers do not, as a rule, issue certificates of insurance with the policy documents. However, if you use an independent business insurance broker, they will usually be able to provide you with a document that you can use as a public liability certificate, if needed.
How much public liability cover do you need?
You can choose the level of public liability cover to have and your choice will depend on the type of business you are operating. Limits start at £1 million and go up to £10 million. In some cases your clients may stipulate the level of cover (or limit of indemnity) they require. If you work for local authorities you will probably need at least a £5 million indemnity limit.
Cover for work at your premises and work away
If you have business premises, your public liability cover will usually be included in a business package or commercial combined policy. You can also buy a separate combined liability or tradesman insurance policy.
Make sure you have public liability insurance for work at your premises and for work away if needed.
Examples of public liability claims:
- A customer slips or trips over in your shop
- Whilst working on a roof, a contractor drops a tool, which hits a person below
- A delegate trips over a cable at a seminar you have arranged
Slips, trips and falls make up the majority of claims and can be extremely expensive. As an example, one of our client’s learned that a customer had slipped whilst visiting their shop. There were no witnesses to the fall. The claim was eventually settled at £14,000 with over £10,000 of that amount being legal costs.
Where to get the best public liability insurance?
As a Kent business owner, how do you decide where to go to find the best public liability insurance?
Arranging the right public liability cover for your business is vital and it’s therefore best to speak to an expert. We recommend contacting a local independent business insurance broker for advice. Look for an insurance broker that specialises in commercial insurance and offers a personal service. They will usually get you several quotes from different insurance companies and then recommend the product that best fits your requirements.
You can buy public liability insurance on-line for some types of business but, in our opinion, this is risky as it is then up to you to decide whether that particular policy is right for your business. This can be tricky when you are unable to ask questions or discuss the policy terms, conditions and exclusions. Policy wordings for this type of commercial insurance are often long and complicated and a good business insurance broker will be able to draw your attention to the key sections.
Most sites that that offer on-line public liability quotes have a limited list of business descriptions to choose from. Your business may not exactly fit one of these categories. If you deal with a business insurance broker they will be able to specify exactly what your business description is, so that the insurer knows what they are insuring. Getting this right is important because the business description is one of the first things a claims handler will look at in the event of a claim.
Public liability – a few tips
A few things to think about when arranging Public Liability insurance:
- Check that the business description fits your business and includes all your activities
- Choose a sensible limit of cover (ask your business insurance broker for advice if unsure)
- Check the policy exclusions and any endorsements. (If you have a cheap quote, this may be because the cover has more restrictions)
- How much excess will you have to pay in the event of a claim?
Get expert help
Here at Breathe we have many years of experience in arranging public liability insurance for sole traders, partnerships and limited companies. We will help you make sure you have the right cover in place.
We are an independent commercial insurance broker based in Kent and provide public liability insurance for most types of business. We compare the market to find you the best value insurance for your business.