Public liability insurance protects you from additional costs if a member of the public files a claim against you in connection with your company activity. These claims can arise from customers, clients, contractors, and other third parties, and your insurance will cover claims for bodily harm, illness, property damage, and death.
Is public liability insurance required by law?
No, public liability insurance is not required. If you have employees who aren't connected to you, the law requires you to obtain employers' liability insurance; whether or not you get public liability is up to you. Still, having the proper quantity of insurance is critical. Getting insured may allow you to attract new clients and join trade associations, but most significantly, it ensures that you will not be saddled with huge fees if something goes wrong.
What is the procedure for purchasing public liability insurance?
The last thing you want is for your business to do harm to another individual, but each line of employment comes with hazards. If your business requires contact with members of the general public, anything could go wrong.
This could be a tiny blunder that causes minimal damage to someone's property, or it could be a fatal accident. Whatever happens, if someone believes they have been hurt by your company actions, they may claim for compensation - and if you are proven legally culpable, you may be required to pay large sums. Fortunately, it is where public liability insurance comes into play. With insurance, your provider will cover any unexpected costs, keeping your bottom line safe.
What is covered under public liability insurance?
Your public liability insurance will cover any additional costs incurred if your company is sued by a member of the public - and there are numerous potential costs. You will need to engage a solicitor if a claim is made against you. Legal fees can be prohibitively expensive, but your insurer will pay to ensure you receive the representation you require. If you settle or the court requires you to pay compensation, your insurance will cover the entire amount. This can include claims for property repair or replacement, medical bills or lost income, and even pain and suffering compensation. It's possible that the court will order you to pay the other side's legal bills, which your insurance will also cover.
Because these claims can cost hundreds of thousands or even millions of pounds, a decent public liability insurance policy should include at least £1 million in coverage. This may appear to be a lot, but it's critical not to be under-insured - if your insurance doesn't cover your expenses, you'll have to pay the difference yourself. That is why it is critical to select the appropriate level of protection.
Who is required to get public liability insurance?
If your firm brings you into contact with people who aren't your direct workers, you should consider purchasing public liability insurance.
Any type of business may require public liability insurance. Public liability insurance is required if you own a physical location where you receive clients, which includes shops, restaurants, cafés, hairdressers, pubs, and venues, among others. It's particularly vital if you do your work in other people's homes, such as as a plumber or electrician. Even if your company is housed in an office, factory, or workshop, public liability insurance may be necessary if clients, contractors, or consumers visit you.
Some occupations may need you to get public liability insurance before you can begin working. For example, if you're a contractor, your clients may need that you be fully insured before they agree to work with you. Many trade groups also require a certain level of public liability insurance for all of their members.
What if I don't carry public liability insurance?
Public liability insurance pays out to cover the costs of any claims made against you; if you don't have insurance, you'll have to pay all of those costs yourself. Solicitors can be costly, and compensation payments can potentially reach into the millions - and without insurance, all of that will have to come out of company money, or directly out of your pocket if you're a lone trader. These claims might easily bankrupt a small firm without insurance: everything you've worked for could potentially go overnight.
However, if you're covered, you'll simply have to pay a few hundred pounds towards any claim. The remainder will be handled by your insurer, who will cover your company for years to come.
Best Chartered Accountants in Croydon has been providing assistance to local businesses. Yes, we can trace our roots all the way back to World War II, and we take great pride in our age.
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