What is public liability insurance for self employed professionals?
Self employed public liability insurance protects you when, despite doing everything right, a customer or third party accuses you of causing them an injury or property damage.
It is a legal cover that provides self-employed individuals and businesses with legal defence against claims of a certain nature:
- An injury to a customer or a third party
- Physical damage to third party property
- Death to a customer or a third party
made by a third party that occurs as a result of their business activities.
The cover also provides financial protection against the cost of compensation if you are found liable, therefore helps to mitigate the financial risk of being self-employed or running a business.
Even when not required by a contract, self employed public liability insurance is recommended as a precautionary measure, as even minor incidents can result in costly compensation claims.
Is business insurance the same as public liability insurance?
Public liability insurance is just aspect of business insurance. Business insurance is a generic term used by insurance providers and it refers to a range of business insurance covers.
What does public liability insurance cover?
If you are accused of causing physical harm to a third party of their property, you are likely to be asked to pay compensation.
Public liability insurance typically covers the cost of compensating third parties for:
- Bodily injury: covers medical expenses, lost income, and other costs associated with physical harm caused to a third party.
- Property damage: covers the cost of repairing or replacing property that has been damaged by the business.
In addition a public liability policy should also cover the cost of defending against a liability claim, including all the legal fees and other related expenses.
Does public liability insurance cover professional indemnity?
Typically public liability does not provide cover include professional indemnity insurance.
Sometimes the two are combined into one policy when a profession is likely to need both—e.g. physiotherapists, builders, etc..
What does public liability insurance not cover?
It won't cover your professional mistakes or negligence that resulted in a financial loss to your clients. This includes an injury resulting from wrong advice—e.g. yoga teacher's instructions leading to a back injury.
It excludes any kind of employers' liability. There is a specific product called employers' liability that you'll need if you have employees.
Who needs public liability insurance?
If at any point during the course of your daily business activities you have face to face contact with your customers or members of the public, you should take time to understand the benefits of self employed public liability insurance.
Without public liability insurance you could face serious financial implications, should someone make a claim against you. Legal costs add up very quickly not to mention any possible payout. However, there are other reasons why you might need public liability insurance:
- Your work contract requires it. If you don't comply with the contract condition and it is discovered, you may lose work and be in breach of contract.
- Pitching for work. Having public liability insurance in place is a competitive advantage which could help you secure a work opportunity. Always mention it to prospect customers.
- It's a trade/profession membership condition. Certain professions need or want to become part of professional bodies or trade associations and PL insurance is a registration requirement. If you fail to comply, you could be struck off.
How to get public liability insurance for self employed professionals?
Your profession and the size of your operations will be the determining factors whether you can simply go online to purchase PL cover or will need to speak to a specialist provider.
Typically heavy manual or medical professions require extra assistance. It is because the nature of those professions are considered riskier by the insurers and they like you to answer a lot more questions.
On the other hand non-manual or light manual professions such as personal trainers, photographers, project managers or hairdressers will find securing public liability insurance much more straightforward.
How much public liability insurance do I need?
The good news is that the number of public liability claims has reduced in the last decade. On the other hand it seems that almost every claim results in defence costs and some kind of compensation.
We have learnt that in 2020 the UK registered over 70,000 PL claims and about 90% of those have resulted in a settlement.
Where compensation is concerned, it varies from claim to claim as you would expect. In respect of bodily injury it is always several thousands at the lower end and has been known to go up close to £500,000 for more severe injuries. Settlements for property damage can be a lot higher and run into millions.
Consider the level of risk during the business activities you carry out. For example if your office is on the top floor of an old building without a lift with steep stairs and no handrail, the likelihood of one of your visitors suffering a fall is quite high.
In other words the circumstances of your business should be the guide to determine what policy limit you need to buy.
