Business Knowledge Hub

Public Liability Insurance FAQ

We've put together a list of the most commonly asked questions regarding public liability insurance covering everything from how it works to how to choose the right policy for your needs.

What does public liability cover protect me against?

Public liability insurance can cover you if a member of the public suffers injury because of the actions of your business, or you accidentally cause damage to someone else's property while carrying out your work. With public liability insurance, you can claim to cover the costs of compensating that person, as well as any legal fees that you might encounter if you're taken to court. Public liability insurance policies can protect you from incidents that occur on your premises, while some may cover incidents that take place at organisations and events organised by your company too.

What isn't included in public liability insurance?

Public liability policies may have certain exclusions within their wordings and endorsements but public liability will not cover damage or injury to you and your own property.

Do I need public liability insurance?

Public liability insurance isn't required by law, but many businesses choose to take out a policy, to protect themselves from the crippling costs of potential compensation payments and managing legal fees. Public liability insurance can also help to put the minds of your clients at ease. You might choose to take out public liability insurance if you encounter the public in one of these ways:

  • You work in public, for instance, you work as a builder and may accidentally cause injury to someone passing by as you build.
  • You work at client locations, for instance, if you're an electrician working on a project within a person's home.
  • You have customers that visit your premises, for instance, if you run a beauty salon, restaurant, or store.

How does public liability insurance work?

Public liability insurance works by offering protection in case your business is responsible for injury or damage to a third party. For instance, if a plumber was repairing a pipe in a domestic property and failed to fit the caps on the water mains properly, this could cause water damage in that building. The people living in the property may sue the plumber for damages, which he could cover with his public liability insurance after paying the excess he had set.

How much public liability insurance do I need?

The amount or level of cover that your business needs in terms of public liability will depend on the level of risk associated with your business operations. You may find that there are minimum accepted standards for the industry you operate in and that may give you a guideline for your policy. Before deciding on how much cover you should buy, think carefully about your risk factors and make sure you find out whether your clients have any specific expectations.

Do I need public liability insurance if I work from home?

If you're self-employed, or you run your own business from home, and you invite clients to visit your home for meetings, then you may still want to consider public liability insurance. This insurance can help to pay for medical bills, legal fees and claims for compensation if someone is injured when visiting your premises.

What is the difference between "general" liability and "public" liability?

General liability insurance and public liability insurance are ultimately different terms for the same type of insurance policy. Public liability insurance is the UK term for business insurance designed to offer protection against third-party damage or injury claims. On the other hand, in the United States, they refer to the same level of cover as general liability insurance.

Will I need additional business insurance besides public liability?

As well as public liability coverage, you may also be interested in purchasing additional insurance for your business. For instance, if your company is one that offers advice or guidance to clients, you may want to consider professional indemnity insurance to cover the costs of paying compensation to a client if your service, advice, or designs cause some form of damage.

Importantly, if your business employs one or more professionals, freelance staff, contractors, or volunteers, you will need to purchase employers’ liability insurance by law. Employers’ liability insurance is a legal requirement that covers you in case an employee claims for a work-related injury or illness.

How much does public liability insurance typically cost?

As with most forms of insurance, how much you pay for your public liability coverage will be decided by a range of factors. For instance, the provider you go to might evaluate your type of business, how many employees you have, and what level of cover you need. Businesses that policy providers consider to be riskier will have to pay a higher price for public liability insurance. The easiest way to figure out how much you might need to pay is to get a quote for public liability insurance online.

Why is public liability insurance important?

Public liability insurance is a crucial form of protection for many businesses. Even when you do everything right in your trade, there's always a chance that something could go wrong, or an accident might happen. With public liability insurance, you can operate your business in the knowledge that, if the unexpected happens, you'll be able to afford the legal costs and compensation expenses of a claim.

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Written by Peter Adams

    Published on 28-06-2018

    Updated on 08-04-2020

Peter reports on a number of areas in the personal finance sector, with a particular interest in supporting businesses and individuals in the UK services industry.

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