Public Liability Insurance: A Guide For Businesses

Posted almost 6 years Ago

Public liability Insurance from your Ipad

Starting and running a business is not a walk in the park. It’s an endeavour that comes with many risks. That’s why you are required to be prepared even for the things that you can't reasonably foresee. One of the best ways to brace yourself against these uncertainties is by taking a public liability insurance cover. This insurance cover is perhaps the most important cover that you need for the success of your business. 

What is Public Liability Insurance?  

Public liability insurance offers your business protection against legal liability to third parties for bodily injury or death and loss and damage to their property as a result of your business activities. The insurance covers the legal expenses that you will incur after a claim is launched against you. The cover also offers you support in case you are held legally responsible for compensating third parties injured as a result of your activities. 

What Does Public Liability Insurance Cover?

Public liability insurance covers a wide array of situations. That’s what makes it perfect for both small and large businesses. The policy generally offers your business protection in the event an individual dies or sustains injuries due to your business activities. It also covers the incidences where the activities of your business cause loss or damage to property belonging to a third party. When it comes to personal property, even a minor damage can lead to heavy compensation costs. You may also be required to settle any outstanding legal fees if the claim is settled in the court. Your public insurance policy may cover these expenses as well.

Who’s Covered?

Public liability insurance covers anyone, other than your employees, temporary staff, people on work placements or students. To be precise, it covers your customers, clients or visitors to your business. It also covers participants and spectators of any event or activity organised by your business. 

Is Public Liability Insurance Compulsory?

Unlike employers’ liability insurance, public liability insurance isn’t a statutory requirement for most businesses. In most cases, you are under no legal obligation to purchase it, except if you own a horse riding establishment. However, there are enough reasons to prove that public liability insurance is not a kind of optional extra. 

Remember that the ethical duty requires that you compensate anyone who suffers loss because of the activities related to your business. Some compensation claims run into millions. This fact should be a sufficient reason to compel you to take public liability insurance cover. In some trades, you may find it hard to operate without this insurance. In fact, few businesses can succeed without this type of insurance. 

How Does the Need for Public Liability Insurance Arise?

Your business activities may result in injury or death to another person. They may also result in damage or loss to property belonging to a third party. If an action is brought against you, the court may find you liable for compensation payments. The liability arises from the duty of care you owe to other people who may be affected by your actions. 

This insurance is a critical requirement if your company interacts with the members of the public in any way. Members of the public, in this case, include your customers, clients and contractors. You can’t avoid interacting with the public as you juggle with your daily business activities. While carrying out your business, members of the public can either visit your place of work or you can visit their places of work. 

Despite all the precautions that you may take, accidents are bound to happen. These accidents can result either from your negligence or events out of your control. Whichever the case, third parties can decide to sue where your business can be held liable. It’s only prudent for you to have the right public liability insurance cover in place. If you don’t have one, you risk paying hefty legal and compensation costs. These expenses can potentially cripple your business.

Most businesses interact with the members of the public, and that explains why most businesses need it. There’s an assumption that home-based businesses don’t need public liability insurance. The assumption is not only false but also misleading. Home-based businesses interact with the public more or less like other businesses. Therefore, the idea that they can survive without public liability insurance is a wrong one.

Most clients are adamant to work with businesses that don’t have public liability insurance. In this case, you are left with no option but to take the insurance cover. Some local authorities also require businesses under their jurisdiction to have the insurance cover in place before they can be permitted to operate. If your business is under the catchment of such authority, then you need to purchase public liability insurance.

How Much Cover Do I Need?

Honestly, this question has no specific answer. It’s like enquiring about the length of a string that you need. Remember that every business is unique. It goes without a saying that the level of insurance cover will differ from business to business. However, most public liability insurance policies provide between £1 million and £5 million in cover. £1 million should be the absolute minimum. However, if your business has regular contact with the public, it’s advisable to purchase a policy that provides at least £2 million. Contact us today to discuss your individual needs with our insurance experts. They will advise you on the most appropriate level of cover for your business. 

What Determines the Cost of Premiums?

Several factors determine the cost of your public liability insurance premiums. The first basis of the cost of the premiums is the nature of your business. Different trades come with different levels of risks. For instance, if you work in an environment with high temperatures, you may find yourself paying high premiums. The same applies to the size of your business. The larger the business, the higher the cost of premiums. The number of employees is also an important factor that determines the cost of your insurance premiums. Having many employees increases the likelihood of the insured risk occurring. In this case, you may pay higher premiums than a business with fewer employees. Your insurance claims history may also determine the cost of your premiums. The frequent the claims, the higher the premiums.


Public liability claims are detrimental not only to your financial strength but also your business reputation especially if no one has got your back. Who can be willing to do business with someone who can’t settle compensation claims following unforeseen accidents? It, therefore, makes sense to protect your business against any eventualities by purchasing a public liability insurance policy. 

Public liability insurance may not completely protect your business if you take it in isolation. That’s why it is bundled with other covers such as employers’ liability and professional indemnity insurance. Visit our Tradesman-Insurance4u site to get more guidance on the most appropriate policy package for your business. You will also get to check our public liability insurance quotes. Don’t accept to get yourself into strife by failing to buy insurance protection for your business. Choose to stay safe and avoid being sorry at the end.

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