Public Liability Insurance - The Ultimate Guide
In 2018, a website reported that the highest public liability claim ever made in the UK amounted £28 million.
Faced with such numbers, do you still think that public liability insurance is needless?
In fact, even if it is not a legal requirement in the UK, every business owner should wonder twice when deciding to purchase (or not) a public liability insurance cover. In some cases, it can literally save your business from bankruptcy.
Let's get to know more!
What is public liability insurance?
The UK law establishes that your company may be held liable for any damages or injuries made to someone's body or property resulting from your work activities or from some goods or products you have supplied.
Public liability insurance covers you against the claims that can be made on your company when such events occur. It can therefore cover the costs of the damages made, but also the legal costs you may face when sued to the Court.
Here is a list of situations in which something may happen and require a public liability protection:
- If you receives external visitors into your premises.
- When you are to work on your client's premises, or your client's work sites (such as in the construction sector for example).
- When your activity makes you interact with the public, with clients and customers (in a restaurant, a shop, a store or a pub for example).
- If you carry out work in special events such as fairs or markets.
In every of these situations, public liability insurance covers the consequences of any unexpected harm your company could cause, and brings you the necessary serenity to carry out your work without worrying.
Why is public liability insurance important?
Having a public liability insurance is the best way to protect your business and your interlocutors (that can be clients, partners, customers, etc.) against any hazard or misfortune occurring in your work environment.
It is a very important protection for it can bring you and your company a decisive financial cover when you have to pay compensation or legal costs associated to an injury or damages for which your are held liable.
That is why public liability insurance should be perceived as a protection shield rather than an unnecessary cost.
What does public liability insurance cover?
Public liability insurance covers you again legal or compensation costs that result from claims that can be made against your company in case someone suffers an injury in your premises or you cause damages while working an another company's site.
|Compensation claims||When your company is held accountable for someone's injury or illness, public liability insurance covers compensation costs owed to that person.|
|Cost of repairs||When you work on your client's place and you cause damages to his premises, public liability insurance takes over the cost of the necessary repairs or replacements to be made.|
|Injury or death||You may be liable for the death or injury of a visitor you received on your premises or when you work into one client's site. In such cases, public liability insurance will cover for you the induced costs.|
|Medical fees||If someone results injured or being seriously ill because of your company, you may be forced to pay the adequate medical treatment (which can be very long and expensive). Public liability insurance covers that.|
|Legal expenses||In conflictual cases, you can be sued to the Court by someone who estimates having suffered damages from your company. Your public liability insurance covers those legal costs necessary to defend yourself.|
How much public liability insurance do I need?
The level of public liability cover you may need considerably depends of your company's size and the kind of activity you carry out.
Usually, most of the public liability insurance plans propose a minimum cover of £1,000,000, up to £10,000,000 for the most important companies.
For example, if you are used to work as a contractor through public procurement, you may have noticed that government or local authorities require levels of public liability cover starting from £5 to £10 million. The level of cover is indeed very specific to each enterprise.
Here is an exemple of the standard levels of cover proposed by one of our trusted providers :
|Item||Level of cover|
|Compensation payments||Up to £5 million|
|Court attendance costs||Up to £250 per day|
|Legal costs for injuries or damages||Up to £1 million|
|Legal costs/expenses in relation with legislation breach||Up to £1 million|
How much is public liability insurance?
Many parameters may make vary the price of your public liability insurance. This price will depend on :
- The industry your work in
- The kind of work you are involved in
- Your business location
- The number of employees in your company
- If you have had claims before
- The level of cover you need.
The main public liability insurance providers propose for small businesses annual deals starting at around £60, which generally includes a standard level of cover. This cost can grow in an exponential manner for big companies carrying on activities considered "risky" (big events organizers for example).
Do I need public liability insurance?
Public liability insurance is not a legal requirement to run a business in the UK. However, it is most recommended among business owners to subscribe a public liability cover in case something happens.
Moreover, in some particular works, businesses may find themselves with the obligation to have a minimum cover of public liability. That is the case for:
- Tradesmen, which will be asked in most cases by their clients to show a public liability insurance proof in order to start trading.
- Companies having contracts with public organizations. In most cases, they will have to make proof of a minimum £5 million minimum public liability cover.
Good to know
It also happens in some companies that the industry regulator of the membership body requires the company to have a public liability insurance.
Which business should have a public liability insurance?
Here is a list of professional activities that particularly need the cover of a public liability insurance:
|Business||Why you should take a public liability insurance|
|Painters & decorators||Imagine your paint bucket falls, and you damage some precious furnitures. It is better being insured against such misfortunes.|
|Taxi drivers||Because in case of any accident in which your client gets hurt, it is likely that you will have to pay for compensation.|
|Cleaners||In case your break something into your client's house, your public liability insurance will cover the repair costs.|
|Builders||The building industry is subject to many on-site hazards for which having a public liability insurance is a must-need.|
|Gardeners||You may work with dangerous tools, that could end up causing injury to someone on your client's place.|
|Electricians||If electrical damages occur as a result of a work of yours, compensation costs can end up very high (especially in case of fire damage).|
|Plumbers||When a water leak resulting from your work occurs, and causes significant damages, you should better being covered.|
How to get public liability insurance?
The best way to find the public liability insurance deal most suited to your company's needs at the best price is to use a business insurance comparator, such as the one we propose. Use our online insurance comparator and check our trusted providers.
Our top 10 tips before you choose your public liability insurance plan
Here is a list of tips you'd better bear in mind when your pick up your public liability insurance quote :
- Before purchasing any public liability insurance plan, make sure you are well informed on the topic and that you understand what is at stake
- If you are a big company, try to calculate the costs that could represent public claims on which your company could be held liable, and choose the adequate level of cover
- Do not always choose the cheapest deal. An appropriate public liability insurance is meant to protect you in case something wrong happen, the risk shouldn't be minored
- If you think you do not need public liability insurance, think it twice
- Once you have purchased your public liability insurance, always keep a record of it, in case a client asks for a proof
- If appropriated to your business, don't hesitate to combine your business insurance into a package which includes public liability insurance
- Try to choose an insurance plan where the legal costs cover level is high - they can reach huge amounts if one day your company is sued to the Court
- If you have a doubt on whether you should purchase a public liability insurance or not, consult your legal advice for accurate responses
- Compare the best business insurance packages with an online platform such as HelloSafe
- Consider public liability insurance as a protection, not a cost
Cleaners, whether being self-employed or part of a bigger company, have an activity for which it is recommended to have a public liability insurance. Indeed, cleaners are exposed to break or damage their clients' equipments or premises. A minimum public liability cover of £1 million is highly recommended.
As a self-employed worker, you may be exposed to cause damage or injury in the most unexpected situations. For example, if you attend a meeting with a client on a pub, and you spill your drink over his / her computer, he / she might claim on you for that. A public liability insurance will cover the replacement costs.
Illness or injury happening to you or your employees is not covered by public liability insurance. Material damages to your premises, tools, stocks, or equipment neither. However, such items are likely to be covered under a more global business insurance package, that we encourage you to purchase.
Events organizers are particularly subject to receiving claims from members of the public that have been injured or when deaths occur. That is why a strong public liability cover is indispensable - £10 million minimum for the biggest events gathering thousands of people (like concerts, festivals, fairs, stadiums, etc.)
The employers' liability insurance covers the risks of an injury or illness affecting the employees of a company within their work environment. Instead, public liability insurance covers damages that could be made by an employee to a member of the public. Indeed, those are two different covers - the first applying for members inside the company, the second applying for people outside the company (but affected by its activities).