Who needs public liability insurance and who doesn’t

In business, just one type of insurance – employers’ liability insurance – is legally necessary. For this reason, you might be tempted to let public liability insurance slip down your priority list. However, this could be a big mistake – and a highly expensive one at that.

Though UK law does not enshrine any necessity for public liability insurance, there remain various reasons why, in practice, you could benefit from taking out this form of cover for your company.

An informative definition of public liability insurance

You might run a business that risks inflicting an injury to a client or a member of the public. Even if your work rarely brings you into close contact with people outside the business, you could still accidentally damage a third party’s property as a result of your work.

Naturally, you are likely to feel devastated if any of these unfortunate scenarios actually happen on your watch. An especially powerful sting could be the financial one, as the inconvenienced third party might opt to bring a legal claim against you, the Federation of Small Businesses implies.

If you lose the case, you would have to pay compensation as well as legal costs and expenses arising from your defence against the claim. However, if you already had a public liability insurance policy in place, it could pay for all of this – up to the limit of your particular policy.

How to assess your need for public liability insurance

As we have mentioned, you don’t need this cover in a legal sense. However, as losing a legal case could land a severe financial blow to your company, having this cover could still provide valuable peace of mind for particular companies – especially public facing ones.

A wide range of companies might, at particular times, encounter members of the public in a face-to-face fashion. These companies include those that welcome customers to their premises; high street shops, cafes and beauty salons would be good examples.

Don’t forget that public liability insurance can cover costs arising from your accidental damage to a property. Hence, if you are a plumber, builder or electrician who carries out work in people’s homes, you should also consider sourcing an insurance policy of this type.

You might be willing to forgo this insurance if your firm’s risks to the public are so low that paying for public liability could feel like a false economy.

Look closely at your contracts with clients

This is advice from the Startups.co.uk website, as you might notice that some of those contracts insist on you holding a particular level of public liability cover. Government contracts, for example, tend to demand cover of at least £5 million.

However, public liability might not be the only form of insurance which your firm could beneficially take out. Hence, if you are a tradesman, you could obtain insurances especially time-effectively by applying through Tradesman Saver – which offers, free of charge, other forms of cover with each of its public liability insurance policies.


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