Do I Need Public Liability Insurance?

By Seamus S

In all honesty it is unlikely that getting public liability insurance will be high up on the list of things to do, yet it could be vital for you to have public liability cover as it will cover you against any legal claims. If you decided not to get cover then you run the risk of being liable for any damages you or your business may cause.

Anyone who has a small business or is self employed sole trader could be potentially blamed for any third party injury i.e. a member of the public, alongside personal injury you and your business can be held responsible for any damage to property.

The first thing to bear in mind when considering if you need cover is if you are dealing with members of the public and in what way are you dealing with them. If you are providing goods or services to the general public, then you can be held liable for any third party damage.

Even thought there is no legal requirement to have public liability cover, the law does state that a businesses or individuals pay for losses caused by the business or its employees. This means that if you don't have cover then you can find yourself paying out for any compensation that the court deem necessary to fix the wrong which occurred. Obviously this will be having to be taken directly out of the business and can be extremely damaging if the reparations are high.

If you work from home you will only need cover if you have customers visiting you on a regular basis, this is also applicable if you are visiting customers in their own home on a regular basis.

When you take out a policy you will be covered against the risk of causing any bodily injury or harm to the person or property of any third party, which has resulted from the ownership use and or maintenance of the insured businesses premises or services.

What you are not covered for is any claims made against you or the business for any negligent advice, for example if you where a doctor and made a wrong diagnosis. If you want cover for this then you will need to look into getting a separate professional indemnity policy.

Public liability cover can cost from as little as £60 a year, depending the nature of your business. A builder is likely to pay more for cover than a door to door salesman as the risk is higher. Other factors in the cost of your insurance will be the business turnover as well as how many employees you may have working for you. Anyone with a small business will need cover ranging from £1 million to £5 million, yet sub contractors working for the local council or government may be required to get cover of around £10 million.

Public liability insurance is the cheap and perfect way to get cover if your business was liable for any damages. Those who opt not to have cover may find themselves paying out for a large settlement and in turn losing their business and in some cases even their home.

Seamus has more articles on public liability.