Guide to Public Liability Insurance

In business, customers are your bread and butter; placing orders, booking your services and feeding your company the profit it needs to prosper and grow. There are, however, some occasions in which a customer can risk harm to your operation, and it’s during these instances that Public Liability Insurance comes into effect.

What is Public Liability Insurance?

Public Liability is a type of third-party liability insurance. It’s specifically designed to offer cover against injuries or accidents a member of the public sustains on your premises or as a direct result of dealing with your company.

If a member of the public decides to sue because they’ve been injured by your business, Public Liability Insurance will cover any legal fees and/or compensation claims that arise.

Is Public Liability Insurance a legal requirement?

Unlike Employer’s Liability Insurance (which protects you from claims arising from your employees) Public Liability Insurance isn’t a compulsory insurance.

Business’s can operate legally without Public Liability cover, but in doing so you would be taking a huge risk. Not to mention, damaging the integrity of your reputation and potential to secure work. For good reason, some companies won’t go near a business that doesn’t have Public Liability Insurance in place, so from a commercial perspective it’s always advisable to invest in this type of cover.

In fact, not having Public Liability protection not only damages your ability to secure work; it also demonstrates a complete lack of regard for the safety and wellbeing of your customers. Plus, if a member of the public were to sue your business and you didn’t have cover, if you’re the owner or Director of the organisation personal assets like your home could ultimately be at risk.

Do I still need Public Liability Insurance if I visit customers at home?

Yes, Public Liability protection is essential if your business has direct contact with customers in any capacity, not only reserved for those organisations that receive visitors to a registered business address.

If your work only brings you into contact with the public when you enter their residence, this doesn’t negate the need for Public Liability Insurance. You could still cause accidental injury to a member of the public while visiting them on location, which would be covered under the terms of Public Liability Insurance.

What’s more, these types of policy also cover accidental damage to a member of the public’s property. So if you’re a tradesman working in a customer’s home and you accidentally cause damage, Public Liability Insurance will protect you if that customer decides to sue as a result.

What types of things are covered under Public Liability Insurance?

Generally speaking, Public Liability protection covers you for accidental injury or damage to a member of the public or their property. This is, of course, a loose definition. The fact is every policy will vary to some degree but when considering what Public Liability Insurance covers you can typically expect the following:

• An accident to the public caused as a result of disrepair.

Even the newest office block or industrial unit can degrade over time. Wear and tear is an anticipated part of the natural aging process, and while you have a duty of care to keep any spaces receiving public visitors safe and tidy, all it takes is something that’s not quite as it should for an accident to occur.

Whether that’s a few rucks in the carpet, a loose floor tile, or a leaky sink – left untreated, these areas of disrepair all have the potential to do harm to third party guests who visit your business premises.

• Slips, trips and falls.

If a member of the public slips and falls on your premises because you’ve failed to put up adequate warning signs, keep walkways clear of obstacles, or respond to liquid spills, they may take legal action against you.

This type of incident is common at restaurants, supermarkets and leisure complexes, where the nature of operations makes spills and slips more common but these aren’t the only businesses at risk. If you leave your tools scattered around a customer’s home and they trip on them, or you’ve recently mopped a floor and not cordoned off the area, this could just as quickly escalate into a situation where you’re being sued for compensation.

• Unforeseen accidents.

While you can take every precaution under the sun to ensure the safety and wellbeing of guests visiting your place of work, the fact is sometimes an accident can occur that no one saw coming. A client may pick up a glass in a meeting only for it to suddenly shatter in his or her hand, or a shelf that’s been secured in place for years could unexpectedly come loose, sending its contents flying.

Accidents of this random nature are an unfortunate side effect of life but if they occur on your property, and a member of the public gets injured as a result, this could have legal ramifications for your company. A Public Liability Insurance policy would cover you for this type of incident, providing you’ve taken all possible precautionary measures.

• Transporting goods or customers.

If you ferry passengers or their personal property as part of your business model, then Public Liability Insurance is an absolute essential.

Whether you’re a man with a van responsible for helping people move home or a taxi driver taking members of the public from A to B, once those passengers and their personal belongings are in your vehicle, you become liable for any injury or damage sustained.

The Health and Safety Executive website has plenty of guides to help protect public health and safety, you can view them here.

Do I need Public Liability Insurance if I already have Employers’ Liability Insurance?

Employers’ Liability is a compulsory insurance that anyone employing one or more members of staff (even voluntary workers) must take out by law. It differs from Public Liability Insurance, not because it’s mandatory but because it covers claims made from current or ex-employees against their present or former employer.

Employees are not covered under Public Liability Insurance, only members of the public, so if you have staff working for your company you are legally obligated to take out Employers’ Liability Insurance. This is its own insurance, in its own right, completely separate from any Public Liability cover.

If you’re a sole trader or no one works for your business bar you (freelance, voluntary, or otherwise) it’s likely Employer’s Liability Insurance won’t apply, but it still pays to discuss your business insurance requirements with a trained professional to be on the safe side.

How much Public Liability insurance do I need?

This depends entirely on the nature of your business and the level of risk it presents to the public but in general most businesses opt for cover in the region of £2-£10 million pounds.

How much protection you need is determined through a consultation with an experienced insurance broker. He or she will be familiar with the unique complexities of Public Liability Insurance and be in a position to steer you towards cover that fully protects your personal and business assets.

In select industries a minimum threshold of Public Liability Insurance is needed in order to meet contractual or licencing agreements. Again, a professional insurance provider will know the intricacies of these clauses and be able to expertly advise you in terms of the optimum level of cover required to conduct your business operations with due care and diligence.

To discuss further with one of our qualified Public Liability Insurance Brokers today call us orcomplete our online form for a Public Liability Insurance quote.

Or read here for 5 questions you should ask your broker about Public Liability Insurance.