Do I really need public liability insurance?

This coverage helps protect you from costly claims related to injuries or damages resulting from your business operations, potentially saving you from significant financial burdens due to compensation claims or legal proceedings.

When Public Liability Insurance Is Recommended

Public liability insurance is highly recommended for businesses involved in any of the following scenarios:

• Working in public spaces or areas accessed by the general public

• Welcoming clients or visitors to your workplace, whether that’s a shop, office, or even your home if you’re self-employed

• Operating on clients’ premises, such as providing services in clients’ homes or businesses

In these cases, public liability insurance can cover costs associated with accidents or damages for which your business could be held liable.

What Public Liability Insurance Covers

Public liability insurance provides coverage for legal liabilities related to claims for injuries or damages caused by your business operations. The policy may cover associated expenses, such as:

• Legal fees to defend a claim

• Hospital charges if emergency treatment is provided

• Repair costs for damages caused during your business activities

• Compensation claims by injured parties

Do I Need Public Liability Insurance If I Have Employers' Liability Insurance?

Employers' liability insurance is a legal requirement for businesses with employees, covering liabilities if staff are injured as a result of their work. However, this type of insurance does not protect you from claims made by the public or clients for injuries or property damage. Public liability insurance is therefore necessary to safeguard against these additional risks.

Determining the Level of Public Liability Insurance Needed

Each business is unique, with varying levels of interaction with the public and risk exposure. Key factors that influence the level of public liability insurance your business may need include:

• The size of your business and employee count

• The level of coverage you desire

• The frequency and type of public interaction

• Specific risks associated with your industry

The premium you pay for your policy will reflect these factors, ensuring that your business is adequately protected. Most businesses, especially those with regular public engagement, could face liability claims at some point, making this coverage invaluable.

Main Types of Public Liability Insurance

There are various public liability insurance options designed to cater to different business needs:

• Limited Company Public Liability Insurance: Protects limited companies from accidental damage claims, shielding owners from potential liabilities.

• Small Business Public Liability Insurance: Essential for small businesses working closely with clients and suppliers, especially those that operate on clients' premises.

• Landlord Public Liability Insurance: Covers landlords against liability if tenants or visitors are injured on the property due to property-related hazards.

• Self-Employed Public Liability Insurance: Vital for sole traders or freelancers, protecting them if a customer, supplier, or member of the public is injured or suffers property damage.

Understanding the Difference Between Public Liability and Third-Party Indemnity Insurance

A common question is the distinction between public liability insurance and third-party indemnity insurance. Third-party indemnity insurance covers professional negligence, while public liability insurance focuses on injury or damage claims made by the public. For example:

• Public Liability: If a client slips on uneven flooring in your shop, public liability insurance would cover their injury claim.

• Third-Party Indemnity: If you advised a client on a product that later caused them harm, this would be covered by third-party indemnity insurance.

Making a Claim on Another Party’s Public Liability Insurance

If you need to claim on someone else’s public liability insurance, you'll need to provide evidence proving the other party’s responsibility for your injury or property damage. Steps to take include:

• Reporting the incident immediately

• Documenting details in an accident book if available

• Collecting contact details of witnesses and taking photos of the accident scene

Example Public Liability Claim

Imagine a customer visiting your premises who suffers an injury while there. They could seek compensation for their injury, potentially claiming for lost earnings as well. Without public liability insurance, the claim process may involve:

1. Receiving a court notice from the injured party.

2. Finding and hiring a solicitor to handle the case.

3. Compiling documentation and evidence of events.

4. Covering solicitor and potential court fees directly.

5. Preparing for a court hearing if the claim proceeds.

6. Paying for any compensation or damages if the court rules against you, as well as potential recovery costs if you win.

By securing a robust public liability policy you can avoid the stresses and costs of legal disputes, allowing you to focus on running your business confidently.