Do I Need Public Liability Insurance?

It can be tough to understand what your company is responsible for in business, whether you operate as a sole trader or as a limited company, and public liability insurance is something that many people voice their concern over.

In this article, we’re going to explore everything you need to know about public liability insurance, when you need it, how much it’s likely to cost and much more.

Additionally, we’ll offer some nuggets of advice which should help you deduce whether you’ll need to attain public liability insurance before carrying out work for your customers and clients.

If you find yourself questioning whether you need public liability insurance, this article will be of great help!

What is Public Liability Insurance?
Do Tradespeople Need Public Liability Insurance?
How Much Does Public Liability Insurance Cost?
How Much Public Liability Insurance Does a Tradesperson Need?
What Does Public Liability Insurance Cover Not Include?
How Do I Find Tradesperson Public Liability Insurance?
Conclusion
Sources

What is Public Liability Insurance?

Public liability insurance is a product of insurance that business owners will pay for that protects the business in any case that they find themselves taken to court by any member of the public regardless of whether it is a customer or client or not.

In the event that your business is sued, this public liability insurance will cover the costs of multiple things like legal defences, compensations and settlement figures that may need to be paid out.

Similarly, public liability insurance covers you if someone is injured whilst residing on your business premises or due to the actions of your business. In this case, the NHS may look to recoup the costs of treatment through your business, which would be covered by your public liability insurance.

It is important to note that public liability insurance doesn’t cover any injury to yourself or your employees, and it doesn’t protect you in the case of an employee suing your company, this is a completely separate insurance cover called ‘Employers Liability Insurance’, and this is a legal requirement if your business has more than one employee.

Do Tradespeople Need Public Liability Insurance?

There isn’t any legal requirement for tradespeople to attain public liability insurance to work in their trade, but there are many reasons why public liability insurance is a good idea to have. By not having public liability insurance, you do leave yourself vulnerable to legal costs in the event that someone sues your company.

These costs are very high and can lead to bankruptcy of the business if you can’t afford to fight the court case with the proper legal support. Additionally, most organisations will only work with you as a tradesperson if you have public liability insurance, as otherwise, it would leave them vulnerable to the same things.

Essentially, it is advised to take put public liability insurance in any business that would be you interacting with members of the public in any capacity to protect you and your business from any court cases.

How Much Does Public Liability Insurance Cost?

Estimating the price of public liability insurance is a difficult thing to do without specific details about your business. However, according to AXA, the average annual premium for public liability insurance in the UK is £119.

Now, this can be paid in full or in monthly instalments, and in the grand scheme of things, this amount is incredibly cost-effective considering the consequences of not having cover but needing it.

Ultimately, for around £10 per month, you can provide your business with a safety net that will ensure its longevity even in the face of lawsuits. There are a number of factors that affect the price of public liability insurance, including but not being limited to:

The size of the business
The location of the business
The industry of the business
The type of work you complete
Annual turnover
Record of previous claims
The level of cover requested
Specific inclusions or omittances in the cover

How Much Public Liability Insurance Does a Tradesperson Need?

Now, each insurance provider will offer different tiers of cover, which will, in turn, cost different amounts. It can be tough to decide how much cover you need, but ultimately, the more cover to take out, the more protected you are from unforeseen circumstances.

Usually, there will be an essential package that will include everything that you absolutely need for public liability insurance.

Again this isn’t a legal requirement, but it is recommended quite broadly. This essentials package will include things like legal support, indemnity insurance, financial loss and other basics.

The higher tiers will usually include everything in the essentials tier with the addition of some added covers such as equipment and tool replacements, personal accident covers and death covers.

Additionally, the higher tiers will usually have an increased amount of money per cover, so for example, the essentials tier may have a total cover of £1million, whereas the top tier may have as much as £5million or £10million.

You can also usually incorporate other insurances into your public liability insurance, like business insurance and employer insurance. By combining all of these insurances into one policy, you’re likely to save a lot of money than you would if taking them out on three separate policies.

What Does Public Liability Insurance Cover Not Include?

Public liability insurance doesn’t cover everything, as we’ve mentioned throughout this article. Firstly, public liability insurance doesn’t cover any injuries to your employees or yourself, as this will be covered in your business insurance.

Now, employers business insurance will cover you in the event that an employee sues you. This wouldn’t be covered on public liability insurance.

Public liability insurance doesn’t cover all of the costs due to the excess that you will pay on all claims. Excess is a pre-agreed figure that you will pay per claim and this is a big factor in determining the cost of the policy.

For example, if you are taken to court and ordered to pay £5,000 to a member of the public, your insurance company will pay this less what your excess is.

Now, it may be £50 or it may be £5,000, but this figure will be your responsibility. When you take out insurance ensure that you are clear on the amount of excess that you need to pau in the event of claim.

How Do I Find Tradesperson Public Liability Insurance?

The internet is the best place to find most things these days, not just because of how easy it is, but because of all the information available.

Firstly, you can use search engines and comparison websites to find some companies that offer public liability insurance.

Next, you can enter your specific information to attain some quotes and use these figures to cross reference against the features and benefits of the policy.

When you find a company and quote that you like the look of, delve a little deeper into the company and look at some reviews from people that have used them for insurance.

Now, don’t just check how easy they were to deal with when purchasing the cover, instead check how they stand up when it comes to making a claim against the insurance, this is where the good companies set themselves apart from the rest. From here, you’re all but done!

Conclusion

Of course, in business it’s important to reduce the amount of unnecessary costs as possible, but while public liability insurance isn’t a legal requirement, it’s far from unnecessary.

Your business is your life, and if you find yourself in an uncomfortable position relating to court cases and lawsuits, you will be more than grateful of the £10- £15 per month you have been paying for your public liability insurance.

Ultimately, public liability insurance is there to protect the longevity of your business and cover you for any of these unforeseen circumstances.

Before you commit to an insurance company for this cover, make sure you do your due diligence into the company history, the amount of claims that they pay out successfully, reviews and any other important information that can indicate whether they are the right company to be working with.