Guide to Public Liability Insurance: Everything You Need To Know

When it comes to business insurance, public liability is a type of protection that all companies have heard of, and none should be without. Having a comprehensive policy in place will not only cover sudden legal expenses which an organisation could struggle to pay for, but may also help it to attract customers. Explore our guide to public liability insurance and see whether your business would benefit from taking out this cover.

What is public liability insurance?

Public liability insurance is one of the main kinds of insurance for businesses. This covers compensation costs and legal fees if someone sues a company because they have been injured or their property has been damaged due to its activities.

What does public liability insurance cover?

Public liability insurance covers the costs of legal action involving a business and members of the public, which could be customers, suppliers and passersby. Injuries or property damage may stem from an incident on company premises or as a direct result of its operations. Although terms and conditions depend on the particular policy, minor incidents and major catastrophes alike are covered by public liability insurance. These are some examples where a business could make a claim:

Accidents due to disrepair

Things like uneven floorboards can be dangerous, as a customer or supplier could easily trip and hurt themselves while on business premises. Similarly, a leaky sink may leave a wet patch for someone to slip on, or an exposed nail could pierce somebody’s skin or tear their clothes.

Slips, trips and falls

A business could be held responsible for a slip, trip or fall if it has directly caused the accident, or failed to respond to a clear risk. For instance, if a floor has been mopped and no warning signs have been placed around the area.

Freak accidents

Regardless of how safe or responsible an organisation is, unexpected accidents sometimes come out of the blue. For example, a glass could suddenly shatter in a customer’s hand, or an employee might mistakenly spill coffee over a customer’s computer during a visit to their home or office. Accidents like these can have significant legal consequences for a company.

Transportation of goods or customers

Businesses responsible for transporting passengers or goods could face legal action if any injuries or damages are sustained during the journey. For example, a customer may suffer whiplash, or an employee could deliver fragile stock that has broken en route.

Why is public liability insurance important?

The cost of compensation payments and legal fees can be extremely expensive when a business is sued. This could negatively impact its operations, or in the worst-case scenario even cause it to close. By taking out public liability insurance, a company can rest easy, knowing that such costs will be covered by their provider and therefore its finances will be protected.

Public liability insurance is also important for customers. They will be more likely to trust a business that has this coverage in place, as they know things like property repairs and medical expenses are guaranteed to be paid for promptly through the policy. It’s common for customers to ask for evidence of this insurance, while some clients may only work with businesses that have a certain level of cover.

Who needs public liability insurance?

It doesn’t matter how large an organisation is, or what industry it is part of. Any business that interacts with the public will benefit from this insurance, as there is a greater risk of them causing someone an injury or damaging their property, and facing costly legal action as a result.

Do I need public liability insurance by law?

Businesses in the UK don’t require public liability insurance by law, but that should not dissuade them from considering this cover. A comprehensive policy significantly reduces the impact of unexpected accidents, and if a company ever does face legal action, public liability insurance will save it a lot of money in the long run.

How much public liability insurance do I need?

Different businesses will need different levels of cover. For example, high-risk organisations — like those who come into frequent contact with members of the public, such as shop and restaurant owners — require more cover than companies which mostly interact with clients digitally. Public liability insurance policies usually cover anything between £1 million and £10 million, and while some businesses will go lower to reduce the premium, there’s a chance that the policy won’t pay the full cost of any legal action they might face. Contact us  for advice about the amount of public liability insurance you need to keep your company safe.

Does public liability insurance cover employees?

No, this only covers injuries and property damage involving members of the public. If a business wants to protect itself against legal action from its employees, it must secure employers liability insurance. This is a legal requirement for the vast majority of UK companies, and covers the cost of compensation and legal fees if an employee becomes ill or injured due to their work activities.

How much is public liability insurance?

The cost of public liability insurance depends on a number of factors including the business size, industry and claims history. While it’s not possible to provide you with an exact figure, we will find you the most affordable option by comparing public liability insurance quotes from all the leading UK providers. Simply submit the information we need about your business so we can find the coverage you need for the best price.

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