If you have a business where members of the public, customers, or clients regularly visit your business premises, you should consider purchasing a public liability insurance policy. Even self-employed home businesses should consider taking out a policy if the above prerequisites apply.
The reason for this is that a single incident involving a customer can ruin your financial status, destroy the reputation of your business and impact the rest of you life. Having public liability insurance provides a financial safety net and the legal resources to fight a negligence claim.
For example, imagine you are a IT support engineer. While visiting a client and helping them with their computer issues, you accidentally knock over a cup of coffee down the back of a server, damaging the hardware and knocking out the server. Not only will the client have to replace their server hardware, but their business may be shut down while they await replacement.
This could cost a company millions of pounds. An electrician can incorrectly wire a fuse box and burn out a circuit, or worse yet, cause a fire that causes immense damage to a property. As you can see, small mistakes here and there can result in large damages, which will bankrupt your business force you to re-evaluate how you make a living.
Amount of Cover Required
Given the potential costs of a public liability claim, you will need coverage that extends into the millions of pounds. For some types of businesses, this insurance is compulsory. Other will demand at least £1 million of cover, whereas in other instances you will need to take out £5 million or £10 million before you can take out a specific type of contract. Moreover, having a high liability limit will give both you and your customers peace of mind.
Having cover is not particularly expensive when compared to other types of insurance, but can be a significant investment for self-employed individuals with less revenue. Of course, more expensive policies are generally attached to businesses that are more at risk, and the more risk you incur the more critical insurance is.
What Your Insurance Covers
Public Liability insurance protects you against lawsuits made by a member of the public as a result of injury or damage to their property. In addition, it will also cover:
- Legal fees
- Miscellaneous costs and expenses
- Medical treatment and ambulance expenses
This coverage will protect you in the event of an injury or property damage caused by you or your employees. It will only cover third party individuals, and not injuries or accidents that affect your employees. Premiums will be calculated on the type of business you run and the estimated level of activity. If any changes are made to your business operations after purchasing a policy, you must report these changes to your provider or you may not qualify for coverage should a claim be filed.
Consulting a Professional
Lastly, it is important to remember that when you shop for public liability insurance, you should take note of any exclusions and conditions that are applied. Often times the cheapest coverage will not provide the coverage you need, as they may exclude certain areas where your business is most vulnerable to a lawsuit.
Consider consulting a professional about the type of coverage you need and be sure the advisor is a member of the British Insurance Brokers’ Association (BIBA).