Public liability insurance covers you for the cost of a claim made by a client or a member of the public that has suffered injury or property damage as a result of your business or a product it has supplied. This means that it protects you against the cost of compensation to be paid out, as well as the legal expenses incurred by the claims process.
This could mean anything from a client or member of the public slipping on a wet floor on your business premises, to tripping over your work equipment when you’re visiting them at theirs. It also covers you for damage to property. For example, if a member of the public were to claim you’d broken their laptop whilst visiting them on business, you’d be covered for the cost of compensation owed to them, up to the limit of your policy.
In addition to protecting your business from past mistakes, public liability also has potential to benefit the future of your business, opening it up to new opportunities where an organisation or trading authority may require a certain level of public insurance in place.
Do I need public liability insurance?
If members of the public interact with your business in any way, from clients visiting your premises and employees working off-site to customers receiving deliveries from the company, public liability insurance will offer invaluable protection from the risks associated with this. While it’s not a legal requirement to hold this type of cover, your business could face costly compensation payments if you were to get sued by a member of the public for injury, illness or damage to property.
Read more on whether your business needs public liability insurance
How much does public liability insurance cost?
The cost of public liability insurance can vary due to the diverse nature of business, depending on factors such as the size of the business, the level of interaction with the public, your claims history and the level or risk associated with the industry. Quotes from Hiscox start from just £55 a year (based on policies from at least 10% of our customers). Some of our policies provide up to £10 million of cover.
Is public liability insurance a legal requirement?
In the UK, public liability insurance is not a legal requirement for businesses and choosing not to purchase this nature of cover will not land you with a jail sentence or a hefty fine. But having the right insurance can make your business look more professional and offer you peace of mind.
You don’t want to get into a spat with one of your best clients over the consequences of an accident or damage to one of their properties, or with a disgruntled customer who slipped on wet floor in your premises. Getting a public liability policy means you can let your insurer deal with any problems, while you get on with running your business.
This could include customers or clients visiting your premises, employees visiting customer or client sites or businesses that involve working in public spaces, such as builders and maintenance workers.
In certain circumstances, a client, industry regulator or membership body may require to hold a certain level of public liability cover as part of your business insurance protection, for example the public sector.
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