Public liability insurance is the same as third party insurance. If you, or anyone associated with a business, causes injury, illness, disease or damage to third party property or persons, this is public liability insurance.
Most individuals will have a form of this cover through their motor or household insurance.
Public liability insurance is also important for all types of business, whatever their size. If a third party alleges that you have caused injury or damage to them it can be a costly process, even if you are not at fault.
Although by law you must have employers liability insurance where you employee people, there is no legal requirement to have in place public liability insurance.
This is interesting because many businesses, through their actions, have the potential to cause quite serious injury or damage. But, the law of the land does not state that they need to be insured. Of course, a sensible and prudent business will have public liability insurance in place. However, for every business with cover in place there will be others who have decided to take a chance without it. Thankfully, there are very few business owners who are foolish enough to trade without this insurance.
Any business trading in the UK should have public liability insurance for a limit of indemnity of at least £2,000,000. Limits of indemnity below this are available but the recommendation is to stick to this limit. Whilst it may seem a bit gloomy, any business should always think of the worst case scenario. Through all of the businesses activities you should consider what could be the most damage you could cause? A plumber could set fire to a block of flats, a manufacturer could install a machine which causes major flooding and the list goes on.
Unfortunately, whatever you do in business presents a risk. We are living in much more litigious times now and if someone is injured we all know how easy it is to get a solicitor to fight your case.
When taking out your public liability insurance you have two options. You can either take out a separate policy just for public liability. Or, you can take out a commercial insurance
package which includes, amongst other covers, public liability.
The only businesses that would usually take out a public liability only policy are tradespersons, such as sole trader carpenters, builders, plumbers etc. Most other businesses will have a business insurance policy that includes public liability.
Most simple business insurance packages, such as pubs, shops, restaurants, offices and hotels, will include this cover as standard. You cannot remove the cover and it will not reduce your premium. Other business insurance policies, such as commercial combined insurance, will include the public liability insurance but there is a premium charged for this cover. Insurers base their public liability insurance premium on how much activity you are undertaking. Therefore, you will need to declare your estimated turnover and wageroll figures for the next twelve months. Once the insurers have these figures they can then calculate the insurance premium for the public liability insurance.
Although you are not legally obliged to have public liability insurance it is very important and well worth the premium charged. You will also have cover against any spurious claims made against you. If someone formally claims against you, this will be raised against your business insurance policy. Your business insurers and your insurance broker, will deal with your claim for you and defend you against spurious claims. All of which removes costs from you.
When purchasing public liability insurance you must receive some professional advice. This will help you decide on the correct limit of indemnity you require, what level of excess you should choose and of course how competitive the premium could be.
Speaking to an independent business insurance broker is the best way to get yourself a policy that gives you the protection you need. Choosing business insurance through a website that compares insurance is not the best way to approach buying this cover. All the website is doing is comparing premiums, not the ultimate suitability of the cover.
Simply put, public liability insurance is a "must have" and you should speak to a business insurance broker to get you the best deal.