Mishaps and mistakes are always waiting to happen and you should never count them out when providing services, on or off your premises. No matter your company has stringent health and safety measures in place, accidents can occur anywhere anytime. Even when you are able to run your business for years without any accidents, it doesn’t mean that you should risk injuries or damage to people from your operations. Public liability insurance is the type of insurance that protects your business’ interests while providing protection to the public.
What Is Public Liability Insurance?
Public liability insurance is an important type of insurance for businesses that protects your interest if a member of the public gets injured on your property or while your employees are providing services on their property. It also covers damage to their property due to your business operations.
Members of the public include your customers and other people who visit your premises for any reason. This type of insurance can thus cover you for the following:
- Accidental injury to people who are not your employees
- Accidental damage to others’ property
It is a Tradesman Saver insurance that protects both businesses and professionals.
Key Points about Public Liability Insurance
The public liability insurance is different from the employers’ liability insurance. Some of the main points you should know about this type of insurance are as following:
- Even when a member of the public present on your premises without permission gets hurt, your business will be liable for the injuries.
- Your business can also be held liable for an accident that doesn’t occur on your property. For instance, a member of the public is injured because of debris falling on road from your vehicle. You can be held liable even when that vehicle is owned by your contractor.
- Public liability insurance doesn’t cover your business if an employee gets injured. That is covered under the employer’s liability insurance.
What to Consider When Choosing the Policy?
When choosing public liability insurance plan for your trade, you should consider some key points. This includes:
- Coverage Amount: This is the most important point to be considered when choosing the policy. Policies can start from £1 million, but if you if have a limited firm you should consider a policy of at least £2 million. If your business operations require you to interact more with people, it is recommended to choose a plan with at least £5 million cover. The higher the interaction with the public, the higher the coverage should be.
- What is Covered: Usually, different areas are covered by different insurance companies. You should choose the one that covers the scope of risks relevant to your business. If your business has operations in other countries, you should again be careful in choosing the right insurer and policy that provides cover in those countries.
- Excesses: Similar to other types of insurance, a public liability insurance policy may require you to pay an amount if a claim is made. These excesses are relatively lower but you should still consider this factor when choosing an insurer and policy.
The insurance premium will be affected by several factors. The annual turnover of your company is a big factor. As a general principle, organisations with higher turnover are required to pay higher premiums. Similarly, the potential of risk to the public from your operations also affects premiums. So if your business operations require your employees to work in conditions or locations where the public is at higher risk, you can expect to pay higher premiums.
Protect Your Business from Financial Ruin
Typically, public liability claims can be immensely expensive. You don’t want to bear the costs of a claim yourself. If an accident occurs that results in a claim, it could financially ruin a small business. Public liability insurance can cover your business from such potential risks without costing big. It can cover the cost of compensation and even relevant legal fees, thus preventing the need to bear the cost yourself.
Must-Have Insurance for Certain Contracts
Public liability insurance may not be mandatory under the law, but some contracts have conditions that make it a must-have insurance cover. In fact, there is a growing trend where it is a prerequisite for certain contracts. These contracts can also specify how much liability cover the insurance should provide. In some cases, it can be the tens of millions of pounds. Sometimes, this type of insurance is also compulsory for membership associations and regulators.
Whether you deal in such contracts or not, getting public liability insurance can prove to be a critical step for your business. It will protect your business from potential ruin by covering you against accidents or mistakes.