Accidents happen, even in the most mundane of settings. Today, accidents involving a third party can be costly for a business. From a member of the public hurting themselves on your premises to an employee accidentally damaging someone’s property, if your business is liable, there may be an expensive compensation claim to pay. With these financial risks looming over you, do you need public liability insurance?
What is public liability insurance?
Public liability insurance protects businesses and sole traders against claims for personal injury and property damage for which they are liable.
If you are at fault for an injury or property damage, you could not only face costly legal fees as you deal with the process but a substantial compensation claim too. To counter these risks, public liability insurance can be used to cover:
- Compensation to the third party
- Medical fees that the NHS may pursue
- Any associated repair/replacement costs in the event of personal property damage
- The legal fees for defending your case
- Expenses
If you don’t hold public liability insurance, you would be left to shoulder all the associated costs.
Do I need public liability insurance?
If members of the public visit or have access to your premises (or your home if you run a business from your property), if you carry out work in other premises or within people’s homes, or if you work out in public places, you are at risk of third-party claims. But is public liability insurance compulsory?
Public liability insurance, though very important, is rarely a legal obligation. However, there are scenarios where you’d struggle to work without it. For example:
- Main contractors may not hire subcontractors unless they hold public liability cover
- Local authorities are unlikely to give an individual or business a contract without sufficient cover on a public liability policy
- Many trade associations and governing bodies will not accept your membership without public liability cover
- Some venues will not allow you to work or host events there without this insurance
Why public liability cover may be right for you
Just because you’re not legally required to hold public liability cover doesn’t mean it isn’t right for you and your business. In almost all working scenarios where you come into contact with members of the public, there is the potential for a third-party compensation claim. Even if this seems unlikely, could you recover from the financial impact of such a claim?
To illustrate the benefits of holding public liability cover, explore the following common use cases.
Commercial premises
If you rent or own commercial premises, there are a range of industry-specific scenarios where public liability could offer you a financial lifeline.
In a café or restaurant, if a server spills a hot beverage on a customer, scalding them or ruining an expensive garment, they could seek compensation. In a hairdresser, beauty salon, or grocery store, a client could slip on a wet patch and break a bone.
If you run a garage, a customer could trip on a cable, or a piece of equipment could accidentally fall and damage their vehicle.
Tradespeople
If you work in a client’s home or other public places, your tools and equipment could lead to accidents. From a homeowner tripping over a power cable to a falling ladder that causes injury or property damage – the possibilities are limitless, even when you follow strict health and safety procedures.
For self-employed tradespeople like plumbers, carpenters, electricians, painters, and building firms that employ multiple trades, public liability can be a valuable asset that acknowledges the industry’s inherent risks. Clients will be pleased to note that you hold public liability, and indeed, some may not allow you into their homes or premises without it.
Mobile therapists
Much like tradespeople, just because you work within a client’s home rather than within commercial premises does not preclude you from liability if something goes wrong.
Mobile therapists like masseuses, nail technicians, beauticians, holistic therapists, and hairdressers must be careful about their insurance cover. It’s essential to understand what public liability will and won’t cover. If you provide a treatment in a client’s home and the treatment causes physical harm, that will not be covered by public liability. You will need specialist treatment risk cover here. If, however, your portable massage table collapses mid-treatment and causes an injury, or you spill nail polish all over their expensive new carpet, you could use public liability cover to handle any ensuing compensation claims.
Outdoor workers
What if the bulk of your work takes place outside? Do you need public liability insurance if you’re a landscaper, dog walker, or any other outdoor worker who tends to provide their services away from other people? If you work for private clients and not the local authority, the choice is yours – but it’s worth remembering that it only takes crossing paths with one member of the public and encountering an issue to land you with a large claim.
If your gardening business’s USP is that you carry out all your green-fingered tasks while the customer is at work, you could still accidentally damage their property or swing open your van door and injure a passerby.
Dog walkers may face issues if dogs under their charge damage a fellow walker’s expensive jacket or injure another animal. Public liability specifically relating to animals (and livestock) can be obtained.
Home workers
If you work from home, you may be asking yourself, “Do I need public indemnity insurance?” If you ever have third parties visiting or entering your home, the answer is yes, it’s a good idea to hold it.
For example, if you’re a home baker whipping up beautiful birthday and celebration cakes, what would you do if a client trips and hurts themselves on a loose paving slab on your garden path when they come to collect their order? If you offer a service like bookkeeping or web design and bring clients into your home office for meetings, though the setting may feel very safe, you’re still wholly liable if something goes wrong. Your pet could knock a cup of coffee onto their laptop, or an unsecured carpet could cause a fall down the stairs.
If you work from home but do not see clients face-to-face, it’s unlikely you’ll need public liability insurance. However, you may wish to take out other forms of cover, such as professional indemnity insurance, which safeguards against claims made concerning the standard of your work.
Events
Are you planning an event? Whether you do this professionally or you are organising a private or community event, public liability cover is highly recommended.
Many events could benefit from cover, including weddings, parties (including children’s parties), fayres and fetes, street parties, festivals, conferences, charity events, and other fundraisers. Whether you’re expecting 50 people or a crowd of 5000, understanding that you, as the organiser, could be held financially liable for any compensation claims makes public liability insurance an attractive option.
Public liability cover can be obtained for a single event, even if said event only lasts a few hours. Often attended by high numbers of people, and with a variety of entertainment and food and beverage activities sharing a space – accidents are a real possibility, especially if alcohol is being served. In addition to careful risk assessments, public liability cover offers extra reassurance. As mentioned, some venues won’t let you host an event without it.
How much cover do I need?
When you come to take out public liability insurance, your insurer will want you to think about your limit of indemnity. This is the amount of cover your business is likely to need in the event of a compensation claim. It will vary depending on the level of risks associated with the industry you work in and the size of your business.
Typically, you’ll be invited to select between £1 million, £5 million, and £10 million of liability insurance cover. Though this level of coverage is high, it is still generally affordable to take out this type of insurance. Smaller businesses may prefer to pay their premium monthly, though there would be savings to be made by paying annually.
So, when do you need public liability insurance? In summary, this type of cover offers you a financial safety net should a third party claim that they were injured or their property damaged due to negligence on the part of you and/or your business. Any business that has some aspect of face-to-face contact with members of the public could benefit from public liability insurance.
Do you need public liability insurance? If this cover feels right for you or has been requested by a contractor, governing body, or local authority, get in touch with the friendly experts at Park Insurance today. With over three decades of experience supporting the UK’s small businesses, we know the right level of cover to offer you the peace of mind you need.