Common questions about public liability insurance

What is Public liability insurance?

Public liability insurance covers costs relating to injury or property damage caused to the public that are deemed to be the responsibility of your business or staff members.

In most cases this cover awards made by a court, legal fees and expenses in bringing in a case. In some situations you may also have to pay compensation to the National Health Service towards medical treatment; these costs can also be covered.

Does this cover employees?

Injury to staff members is instead covered by employers' liability insurance. This is mandatory under a 1969 act.

Injury or damage to the public caused by your employees does come under public liability insurance.

How is the cost decided?

The pricing of public liability insurance can vary from business to business. Most will take into account the size of your business, in terms of employees and/or turnover. It's also common for a company to take into account any previous claims you have made (or incidents where you would have made a claim if covered). In some cases, there will be specific adjustments to the premium based on the safety practices you follow in your business.

You will need to check the terms and conditions of your policy carefully as in most cases acts of negligence on your company's part may limit or invalidate the protection which insurance gives you.

Is public liability insurance compulsory?

In most cases public liability insurance is a voluntary measure. In practice, though, you will often find that suppliers and customers won't deal with you unless you have adequate cover.

One example is live events such as entertainment or sport, where most venues will demand you have public liability insurance. This is to make sure that in the event of an audience member being injured, the claim can be dealt with by the company running the event, drastically reducing the chance of action against the venue.

There are certain types of business where public liability insurance is mandatory. Generally these include businesses where the service offered to customers involves inherent dangers such as extreme sports.

Are there any exceptions to what is covered?

As a general rule, you won't be covered for damage caused by a business activity you carry out which is illegal in itself.

Do self-employed people need public liability insurance?

A self-employed person, particularly one who works from home, is less likely to need this cover. The question to consider is where your work-related actions pose a risk of causing injury to others. If clients visit your office or home, you may want to look into cover in case they are injured on your premises.

Do I need cover if I have a great safety record?

It may seem that insurance cover is not needed if you strictly adhere to safe working practices when dealing with the public, but there are a couple of reasons why public liability insurance is still worth considering. One is that there may be a "freak accident" which is still deemed to be your responsibility. Another is that the policy may cover your legal fees if you successfully defend against a liability claim, minimising the risk of you losing out even when you are not to blame.

Is it possible to compare public liability insurance quotes like other types of cover?

Thanks to the internet, it is now possible to compare multiple policies and providers of public liability cover in a similar way to car and home insurance. Although the choice of companies is much more limited, online business insurance comparison sites such as Coverzones, Simply Business and Swintonoffer price and policy comparison services for most types and size of business. However, if your enterprise is a little more unique, there are a range of more specialist brokers who may be able to help.