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What Does Public Liability Insurance Cover Me For?

Public liability insurance protects your company from certain injury, damage, or loss claims made by a third-party as a business owner. It covers money needed for medical treatment, repair or replacement, and settlement payments.

Once a claim is made against your business, the costs can quickly build, and public liability insurance protects you from having to make payments of large sums of money. Fees like transportation, legal fees, and the cost of repair or replacement of property can be expensive. Your policy will cover fees and costs for all of these items.

Public liability insurance is not required by law, but most companies carry it to reduce their financial exposure in the event of accidents or incidents. If a company has no coverage in place, then financial settlements and other payments like legal or medical fees must be funded by the business or paid from the owner’s assets.

What is covered under public liability insurance?

Public liability insurance covers costs of work-related accidents that affect the third party and is therefore essential for businesses that frequently deal with members of the public. Things like trips, slips, and falls can result in a claim being brought against your company. The same applies to any damage caused to a customer’s property during business operations.

Business premises such as office locations, warehouses, or even home-based businesses are all protected under this type of insurance. Coverage extends to other property, such as a client’s home. If an incident happens while business is being carried out, any damages made will be covered by your public liability policy.

For example: If during a kitchen installation in a customer’s home, a joiner moves a cabinet and accidentally breaks a window, the damage would be covered under public liability insurance.

What is not covered by this type of insurance is accidental injury or damage to yourself as the owner of the business or to your employees. Different insurance is required to protect you from compensation claims in these instances. This is known as Employer’s Liability insurance and is required by law.

How much public liability insurance do I need?

There is a wide variance between companies when it comes to size, type of business, and risk exposure. Determining your public liability insurance’s correct policy limits is important to ensure that your business has appropriate coverage levels.

With policies ranging on average from £1 million to £10 million, it can be advisable to engage a professional’s services to help. The amount of cover you will need to purchase depends on many factors that will affect the outcome. Considerations like the kind of business you operate, whether you are a limited company or sole trader, and how much interaction you have with the public will all need to be assessed.

Policy amounts are determined by weighing all the factors and calculating the perceived risk. A high number of potential claims will require a higher amount of coverage to ensure your business is fully protected from legal proceedings.

What is the difference between public liability insurance and employers’ liability insurance?

As an employer and business owner, you may be wondering what is public liability insurance, and how does it differ from employers’ liability insurance? One of the biggest differentiators is that having employers liability insurance is required by law, and public liability insurance is completely voluntary.

These two insurance provide completely different types of coverage. Public liability protects your business and personal assets from claims brought against you by a third-party. Employer’s liability insurance protects your business from compensation claims made by employees. Employee claims can be for things like accidents, diseases, or illnesses caused by working at your company.

If your business employees even one person, you will need to have employer’s liability insurance. Policy coverage usually starts at around £5 million, with standard coverage typically averaging £10 million and can reach much higher for large corporations.

Here is a quick reference guide that highlights the differences between the two types of insurance.

Public Liability Employers Liability
Is it legally required? No Yes
Who does it cover? Third parties (public, customers, etc.) Employees
What does it cover? Personal injury, damages, and loss Work-related accidents, illness, and disease
Typical coverage amounts? £1 to £10 million £5 to £10 million and up

Both policies will provide a certificate as proof of insurance. A certificate provided for an employer’s liability policy must be available to be accessed by all employees of the company. Many businesses will display their certificate in a staff room or entrance foyer area where it is easily visible. Recent legislation means that businesses can now choose to display their certification online.

As it is not required by law, public liability insurance is under no legal obligation to display their policy certificate.

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