Public Liability

You might be asking, ‘what is public liability insurance’? Well, public liability insurance is a type of insurance for businesses which covers the cost of claims made by members of the public due to injury or damage to their property caused by your business activities. If someone is injured or their property damaged while you are conducting your normal business operations, they may take legal action against you to recover their losses. Public liability insurance is designed to help protect your business by ensuring that if this happens, you don’t have to pay any legal compensation costs or for repair or replacement of damages out of your own pocket. For a small monthly premium, you could save thousands of pounds – it’s a no-brainer!

What Does Public Liability Insurance Cover?

Any claim made by a third party, often members of the public or customers, for injuries or damages to property they may have suffered as a result of your business’s activities can be covered by public liability insurance. Typically, Public liability insurance will cover legal costs, medical treatments and compensation costs and can cover other miscellaneous claims, depending on your business and the coverage included in your policy.

What’s covered:

  • Up to £5 million cover for compensation payouts.
  • £250 per day for court attendance, to defend a claim.
  • Legal costs or expenses of up to £1 million for various claims against the business.
  • Access to 24/7 helpline.

What’s not covered:

  • Personal injury – to cover injury to yourself you will need health and safety insurance.
  • Employee claims – public liability won’t cover this as you’ll need an employer’s liability policy for these situations.
  • Your own property and equipment – this needs a tools and equipment policy or a combined policy.

Importance of Businesses of Public Liability Insurance

Public liability insurance is vital for protecting businesses businesses from loss of reputation and finances. Whether your business is in retail, hospitality, construction or the motor trade, public liability will be an important tool in your kit. The main reasons it is so vital are:

  • Financial protection

    Accidents do happen, but the resulting claims don’t have to cripple you if you have the right level of public liability insurance to protect your business.

  • Legal or contractual requirement

    For some businesses having UK public liability insurance cover is a legal necessity to keep your business compliant and prevent fines, lawsuits and even the suspension of business operations. In some instances, it is a contractual condition to do business with other corporations, and having coverage can open up more business opportunities.

  • Protection of reputation

    Handling incidents professionally and efficiently will help to maintain and enhance the business’s reputation and build trust with clients as they have confidence that if anything goes wrong there is a safety net in place to handle accidents or damages.

  • Peace of mind

    The security that having good public liability insurance in place brings means that as a business owner, you can focus on the operations of your business without the ongoing worry of possible accidents or claims.

For those who organise events, from renting bouncy castles for parties or weddings to large festivals with many public areas, having public liability insurance will provide the financial protection and legal coverage you need to ensure that you’ll be able to organise it again without the fear of crippling costs to pay to remain in business.

What are the Benefits of Public Liability Insurance?

There are multiple benefits to businesses of having public liability insurance. These benefits act as a safety net against unseen or unexpected events and help to protect the reputation and financial health of the company.

Financial Protection

Financial protection against potentially massive payouts for medical expenses, legal fees, or compensation for injuries or damages.

Peace of Mind

Business owners have peace of mind knowing their business is protected, which enables them to run their business and make confident decisions.

Business Continuity

Large claims can disrupt operations and lead to bankruptcy, but public liability insurance covers legal fees ensuring business continuity even during a claim case.

Enhanced Reputation

Having public liability insurance enhances business reputation, attracting bigger clients and contracts as it showcases responsibility and preparedness, creating an atmosphere of trust.

Cost Savings

Though there's an initial cost in purchasing insurance, the savings made in the event of a claim far outweigh the cost of the premium, resulting in significant cost savings.

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The Cost Factors of Public Liability Insurance

The cost factors of public liability insurance will vary a great deal, depending on a wide range of different factors. An insurer will take into consideration some, or all, of these things to make sure that the public liability insurance policy covers everything your unique business needs to protect. Factors to consider include:

  • Nature of the business – high-risk companies, such as construction crews, will likely face higher costs to insure than a low-risk company such as an accounting firm.
  • Business size and revenue – bigger companies can be seen as having greater exposure to potential claims.
  • Location of the business – areas with a history of high claim rates or more urban city centres may have higher premiums.
  • History – history of claims and also the history of the company and how long it has been operating can both affect the cost of coverage.
  • Type and amount of coverage – additional coverage and policies, such as product liability, will add to the premium’s cost.
  • Exposure to the public – companies with more significant public footfall, such as retail stores or event spaces, will most likely have higher premiums due to the higher level of risk of incidences involving the public.

There are more specialised factors to take into account for certain businesses and not every factor will apply to all businesses. Here at Prime Cover, we specialise in working out the most cost-effective and competitive premium rates for all of our customers, no matter the size of their business.

What’s covered:

It’s essential for your business to have the right level of coverage to properly protect your interests, but without paying for cover that you don’t need. Here are some tips to help you make the best choices:

  • Assess your risks – you should work out what you need to have covered and then base your decisions on those requirements.
  • Decide on the coverage limits – decide on the maximum amount you might need to fork out for a single claim, adding up legal fees, medical costs and other related expenses.
  • Consult a specialist – an insurance broker can advise you about the best kinds of coverage for your industry and can find quotes from different insurance providers.
  • Consider add-ons - decide if you need additional policies for your unique business, whether product or employer’s liability or property insurance.
  • Compare quotes and read the policy exclusions and small print – work out what isn’t covered, if you need to add on other policies to bridge the gap and what the policy cancellation terms are.
  • Research the financial strength of the insurers and how they will handle your claims based on other customer’s experiences.

Remember that the cheapest policy isn’t always the best, make sure you look for a balance between affordability and coverage to make sure you have the best possible protection for your business.

FAQs

Simply put, some tips on selecting appropriate coverage include:

  • Assessing Risk: Examine your business's activities to determine potential hazards to the public, for example, a construction company faces different risks compared to a café.
  • Understanding Policy Terms: Familiarise yourself with terms, exclusions and conditions. Ensure there are no coverage gaps that might leave you exposed.
  • Comparing Quotes: Obtain multiple quotes from different UK insurers. Consider factors beyond price, such as the insurer's reputation and customer service.

If it all seems too bewildering to make a clear choice, get in touch with our expert team for personalised advice and a free, no-obligation quote.

There are several steps to take in filing and processing claims:

  1. Report the incident: Notify your insurer immediately after an incident occurs.
  2. Document everything: Take photos, gather witness statements and retain any other evidence related to the claim, such as police reports.
  3. Complete claim forms: Your insurer will provide forms to detail the incident and you need to complete and return these quickly.
  4. Insurer's investigation: The insurer will review the claim, which might involve sending an adjuster or seeking expert opinions.
  5. Claim outcome: Your insurer will either accept the claim and decide your amount of compensation or reject it. If it is rejected, there's often a process to dispute the decision.

In the UK, public liability insurance isn't a legal requirement for all businesses. However, there are some instances where it is required:

  • Contractual Obligation - some clients or venues might require it as part of the contract terms.
  • Licencing - some professional bodies or licenses may make having public liability insurance
  • Peace of Mind - even if not obligatory, it's recommended for businesses interacting with the public because it safeguards against potential compensation claims.

Special Cases - while public liability insurance isn't a universal requirement, employer’s liability insurance is mandatory for businesses with employees in the UK.