What is public liability insurance?
Public liability insurance provides self-employed individuals and businesses with cover against claims from the public. It covers legal costs and compensation for incidents related to your business, protecting you in cases of injury, death, or property damage.
The compensation under the cover becomes payable if you are found liable. This element of public liability insurance 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.
How much does public liability insurance cost?
Public liability starts at £5.92 a month or £71.04 a year for £1,000,000 cover. The price of public liability insurance varies depending on factors such as the type of work you do, required coverage limits, the size of your business, annual turnover, and claims history.
Public liability insurance at Suited
What does public liability insurance cover?
Public liability insurance provides protection in a variety of real-world situations where your business activities unintentionally cause harm to a third party or their property.
Bodily injury:
- A plumber accidentally leaves a toolbox on a client’s staircase, and the homeowner trips over it, injuring their ankle. Public liability insurance could cover the medical expenses and compensation for the injury.
- A consultant visits a client’s office and accidentally spills coffee, causing the client to slip and injure themselves. Insurance could cover their medical bills and lost wages during recovery.
- A builder is working on-site, and a piece of falling debris accidentally hits a passerby. Insurance can help cover the medical costs and any legal claims that arise.
Property Damage:
- An electrician installs a light fixture that later sparks and damages the client’s ceiling. The insurance could cover the cost of repairing the damage.
- A photographer is on a client’s premises and accidentally knocks over a valuable vase.
What does public liability insurance not cover?
Public liability will not 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., a 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 your business involves direct interactions with customers or the public, you should think about obtaining public liability insurance. Although it is not legally required, this insurance provides protection in the event that someone is injured, killed, or has their property damaged as a result of your business activities.
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 prospective 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.
Is public liability insurance required by law?
In the UK, public liability insurance is not legally required for businesses or self-employed individuals. However, your professional standards body, local authority, or clients may request it.
The only insurance policy you are legally required to have as a small business is employers' liability insurance. While public liability insurance is not mandatory in most cases, it can be extremely beneficial.
How much public liability insurance do I need?
Public liability insurance can offer limits up £1 million, £2 million, or £5 million. Cover of £10 million is also available, but this amount may not not be available for every business.
To determine the right level of cover for your needs, consider your contractual obligations and the potential compensation claims you might face. Keep in mind that while public liability insurance is not legally required, so the amount of coverage you select is ultimately your decision.
Where compensation is concerned, it varies from claim to claim, as you would expect. In respect of bodily injury, it is always several thousand 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.
Can I get monthly public liability insurance?
With Suited, monthly public liability insurance is easy. Get tailored pay as you go public liability insurance from just £5.29 a month. While public liability insurance for one month is generally not recommended, short-term cover may be right in certain situations.
