Is Public Liability Insurance a legal requirement?
Public liability insurance is not a legal requirement for most businesses*, however the consequences of not being covered can be severe.
Even if a business takes all the necessary precautions to avoid mishaps, accidents can happen. This can result in a legal battle which could be financially damaging or even detrimental to your business, especially if you wouldn’t have the means to settle a claim without the right insurance in place.
Public liability cover won’t protect you retrospectively, therefore it’s a good idea to arrange insurance before you interact with members of the public, clients or contractors.
*If you own a horse-riding establishment you are legally obliged to have public liability insurance. For more information contact your local authority – contact details for your local authority can be found through the GOV.UK website.
How much cover do I need?
The level of cover required depends on a number of factors as well as the risks your business faces through interactions with clients or members of the public.
To decide the level of cover you need you should consider the financial consequences you may face in the event of a claim, based on a worse-case scenario. Then work out what your business could afford to pay, and the difference between the two should be your minimum level of cover. You can then choose whether to increase the level of cover and add any extra options at your preference.
Customers, clients or contractors may require a minimum level of public liability insurance before they’ll consider working with you, so as a minimum you’ll need to at least match this level.
Who does it cover?
Public liability insurance covers anyone with whom you interact as part of your business operations, with the exception of employees. Examples of those covered by Public Liability Insurance include:
- Customers
- Clients
- People visiting your business premises
- People taking part in events or activities you have organised
- People watching events or activities you have organised
Public liability insurance does not cover employees. This includes temporary staff, students or people on work placements. For this you need employers’ liability insurance.
How much does it cost?
The total cost of public liability insurance varies between businesses as each business is different. The cost of the policy is dependent on a range of factors, such as:
- Nature of your business
- Size of the business (determined by turnover or number of employees etc.)
- Insurance claim history
- Risks specific to your company operations or industry
- Level of cover
- Businesses that are perceived as riskier will usually pay a higher policy price.
Another important factor to consider is choosing the right provider for your business insurance. The overall cost can vary dramatically between providers, even for the same or similar levels of cover, so it’s always worth comparing a number of providers to ensure you get the best deal.
Start comparing public liability insurance for your business now.
