What is public liability insurance?


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Public liability is a type of insurance for businesses of all sizes, across a variety of industries. It covers you if a client or member of the public claims they have been injured, or their property damaged, because of your business activities.

This type of insurance is designed to protect business owners against claims that result in legal proceedings. If a claim does become a legal matter, a policy will cover the cost of these expenses, including any compensation you are required to pay.

Public liability claims can arise from several circumstances, but negligence is the main trigger. A customer might trip on an uneven surface at your premises or a member of the public could injure themselves on a piece of your equipment. It will also cover claims of property damage. For instance, if you accidentally knock over a mug of coffee, damaging a client’s laptop during a meeting, your policy will cover the associated compensation costs.

It’s also important to note that some trading authorities and other organisations might require you to have a certain level of public liability insurance in place. Therefore, a policy doesn’t only protect you from previous mistakes – it can also help you secure new business opportunities.

 
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Guide to public liability insurance

As a forward-thinking business owner, you’ll want to ensure you’re protected for all eventualities. Watch this video guide to understand how a public liability policy can help.

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Do I need public liability insurance?


Public liability insurance isn’t a legal requirement, but it’s highly recommended if the nature of your business means you regularly interact with the public, clients and contractors.

Accidents happen, even when you’re doing all you can to avoid mishaps. A legal battle could be financially damaging to your business, especially if you wouldn’t have the means to settle a claim without the right insurance in place.

While cover isn’t mandatory, it can provide key assistance. Since public liability cover won’t protect you retrospectively, it is a good idea to purchase insurance before you interact with clients or members of the public.

An office mishap

When visiting your client for a regular catch-up, your employee leans over to pick up a glass of water and accidentally knocks your client’s tablet off the desk, damaging the screen. Perhaps your client visits your office premises just after the floors have been mopped, but no sign is in place and they lose their footing and injure their hip. Public liability insurance covers you for scenarios both in your place of work, and at your client’s office too.

A falling sign

A team of your employees attend a big trade show to drum up some exposure for your firm. You decide to send them off with your new marketing stand, but during the show one of the boards falls and injures a passer-by. This unfortunate episode could turn into a costly one if that person decides to sue. Attending or hosting industry or charity events exposes you to these types of risks.

In your own home

A client could turn up to a meeting at your property and twist their ankle on the uneven step you’ve been meaning to get fixed. As the driver delivering your marketing flyers drops them off in your hallway, they could trip over the telephone wires and fracture their wrist, leaving them unable to drive or work. Incidents can happen even when you’re a home-based business and public liability cover can help.

What does public liability insurance cover?


Public liability insurance covers claims made against your business by clients, contractors, or members of the public for accidental injury or damage to their property. This could arise from an incident on your business premises or as a direct result of your operations.

In the case your business is found to be responsible, this insurance will cover the associated costs, including compensation payouts and legal fees such as the cost of defending yourself in court.

Public liability cover ensures you’re protected for these instances and offers something different to other insurance types. For instance, professional indemnity covers claims of fault with your work and employers’ liability covers you specifically for claims from employees. Meanwhile, personal accident cover protects the business if you or a key team member suffer from an illness or injury and are unable to work, and office insurance protects the premises you work from.

Having comprehensive cover that encompasses all the policies your business requires provides the reassurance you need to concentrate on the task at hand.

To better understand who needs public liability insurance, what it covers and if your business requires a policy, it can be helpful to read through real-life examples of public liability claims.

How much public liability insurance do I need?


The cost of public liability insurance can vary due to the diverse nature of business and the type of industry your firm operates in. Having a public liability policy isn’t compulsory so how much cover you take out is up to you.

The best way to work out how much cover your business needs is to consider factors such as the possible extent of compensation claims and how much it could cost to repair any damage.

The amount of cover you require will depend on details such as:

  • Size of the business
  • Level of interaction with the public
  • Scale of contracts
  • Your claims history
  • The level of risk associated with the industry
Not sure what you need?

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Related guides & FAQs


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What is the difference between professional indemnity and public liability?

Public liability and professional indemnity both help to protect your business, but the nature of claims differ for each. Discover more about these cover types and the differences between them.

personal liability

What is personal liability insurance?

This insurance can protect you against third party claims, but your personal and professional circumstances determine whether it’s required. Learn more about personal liability cover.

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Do I need public liability as a sole trader?

As a sole trader, you could be held accountable for accidents related to your work no matter where you’re based. For more information, read this Hiscox guide to public liability cover for sole traders.