If your business involves any connection with the public – and most businesses do – then public liability insurance should form an integral part of your business insurance.

It provides compensation and legal costs, should a member of the public sue your company for damage to their possessions, bodily injury or death as a result of your negligence.

Here’s an overview of public liability insurance.

Public Liability Insurance Definition

Imagine you’re a hairdresser visiting a client at their home and you spill dye on their carpet, or an employee fails to put out a “wet floor” sign out after cleaning and a customer slips and breaks their leg.

In the above situations, your business could be on the receiving end of a lawsuit. Public liability insurance could cover compensation costs and legal fees associated with a claim for damaged possessions, bodily injury or death to a member of the public, whether they’re a customer, supplier, contractor or simply a passer-by.

Do I Need This Insurance?

Public liability insurance isn’t a legal requirement. However, many businesses see it as essential to protect them from potential high compensation claims. Some clients may insist that you have it before engaging with you, as do some trade bodies and professional associations.

Think carefully about purchasing public liability insurance if customers visit your premises, if you work on client sites, or you work in public, such as a builder. It’s ultimately your decision, but could you afford the time and expenses associated with facing a claim if you didn’t have insurance?

What Does Public Liability Insurance Cover?

Public liability insurance covers your legal liability if you or an employee is deemed responsible for damage, injury or death arising from your business activities.

This includes the cost of repairing or replacing possessions, NHS hospital costs, legal fees associated with defending a case, and compensation claimed by the member of the public, which could include reimbursement for loss of work.

What Level of Cover Do I Need?

Each business is different, so it’s up to you to decide on the level of cover you require. There are a number of factors to consider, including the size of your business, the level of risk associated with your work, and your level of involvement with the public. Some clients may also require a certain limit of cover before offering you work.

Options usually range from £1 million up to £10 million. It’s best to seek advice from a specialist business insurance broker who can help to assess your risk and recommend a suitable level of cover.

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