Public liability insurance – guide for business owners

Public liability insurance will protect your business if you cause an injury to a member of the public, or property belonging to another business or individual.

You should consider taking out public liability insurance if members of the public visit you at your place of work, or if you perform work at places of work owned by third parties.

Public liability insurance – what does it cover?

A public liability 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.

Who should consider this type of cover?

• If you have business premises that are visited by clients and members of the public.
• You organise events, away from your business premises, that are attended by members of the public.
• You run your small business from your home, and people visit you for professional reasons.

It doesn’t cover claims from your own employees

Public liability insurance does not cover claims made by any of your employees, temporary staff or students you work with.

If you employ anyone, you must have employers’ liability insurance. The penalties for failing to have adequate cover in plce are severe.

Examples of public liability insurance claims

To help illustrate how public liability insurance works in practice, here are some classic scenarios where public liability cover will protect your business:

• A self-employed PC support worker visits a client site to mend some equipment. He accidentally spills coffee on the client’s main server and causes some permanent damage.

• 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.

• You own a 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?

Cover tends to start at the £1 million mark and can be purchased in increments up to £5 million or £10 million.

In some cases, you may be contractually required to take out a certain amount of cover, for example, if you do work for a local authority, or are an IT consultant. Otherwise, it is up to you to choose the level of cover you think is sensible for your business.

You will find that many insurers offer public liability in a bundle with employers’ liability and professional indemnity insurance as they are commonly purchased together.

It’s very likely that you will be able to save money by purchasing a bundled insurance policy rather than each component separately, so it’s worthwhile looking at.

How much does it cost?

Unsurprisingly, any quotes you get will be based on several factors, which are unique to your business, such as:

• What does your business do?
• How many employees do you have?
• What is your claims history like?

For most small companies, public liability is a very affordable type of insurance.

How to get a public liability insurance quote

Try our dedicated insurance partner – Qdos. Qdos offers a specific public liability insurance policy for the self employed which is ideal for sole traders or limited companies.