Public liability insurance - What exactly is it?

Public liability insurance - What exactly is it?

What is it?

We’ve heard it called many different names, Personal Liability Insurance, Public Indemnity Insurance, etc., but all roads lead to Public Liability Insurance!

Think about your own business, chances are you and/or your employees come into daily contact with customers and members of the public, whether you are working at their premises, or at locations frequented by the Public, or clients are visiting your premises.  

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If a customer or member of the public gets injured or suffers damage as a result of the actions of you or your employee (for example they trip over your tool bag or laptop case), then they could look to sue you for damages.  In a nutshell, that is the cover provided by Public Liability.

Check out our video comparing Public Liability and Professional Indemnity

Why should I buy PL Insurance?

In today’s litigious society, we’ve seen significant growth in liability and injury claims. The Association of British Insurers reported that the number of bodily injury claims received by insurers increased by 72% from 2002 to 2010.

A serious injury claim can run into hundreds of thousands of pounds, which can cripple even a sizeable business if they do not have the appropriate cover in place.

Also, if you are a sole trader or partnership, your assets and home could be at personal risk.

Is it a legal requirement?

Unlike Employers Liability Insurance, legally, there is no formal requirement to buy cover.  

However, in reality, if you work on a customer premises, on-site, sub-contract to a larger contractor, or are tendering for a contract, it is highly likely that cover will be a stipulation before you can begin work.

I have a robust Health and Safety policy in place, surely that replaces the need for cover?

Building a health and safety culture and best practice within any business is critical in terms of mitigating risk, insurers will also view this favourably when assessing premiums.

However, the risk of a claim still exists.  

It’s not just valid claims which can cause an issue, defending fictitious claims and those where you feel you are not responsible, is both time consuming and expensive.

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How do insurance companies calculate premiums?

Underwriters will look at several key areas when assessing the level of premium required:

  • Your type of business and exposure to risk - For example, an advertising consultant based in an office is less risk than a ground-worker setting foundations for a new block-of-flats.
  • The type of work you do – Even within the same trade, risks can differ. For example, a decorator painting my lounge is obviously a lesser risk than someone wearing a harness, painting the clock face on Big-Ben.
  • Your volume of work/number of employees (the more people you have working for you and the amount of work you are carrying out increases the risk of a claim.  Your Insurers will typically ask how many employees you have working both manually and in non-manual rolls (e.g. bookkeeper) and/or your turnover and wage-roll when reviewing liability risks.
  • Previous Experience – If you have worked in your trade for 20 years without a claim that is obviously a great indicator that future losses are less likely.  That’s not to say it is impossible to arrange cover for start-up businesses or those that have suffered a claim, a good Insurance advisor will be able to engage underwriters to ensure they understand the full picture and rate the risk appropriately.

How can I save money on my Public Liability Insurance?

Running a business is tough, and we are all looking to save money wherever we can.  In terms of Public Liability, it is often possible to save money by:

  • Compare Public Liability Insurance prices – Or using a specialist business advisor such as Insync Insurance who can compare prices for you
  • Making sure your insurer has your correct details – If you’ve reduced your number of employees from 6 to 3, this could significantly reduce your premium
  • Reducing your exposure – Introducing new practices to reduce risk or no longer working at high-risk locations can save you money on insurance premiums.  Speak to your Insurance advisor and make sure they really understand your business and get some advice on areas which could be increasing your premium.

FREE Business Insurance Review

As a specialist digital insurance broker, Insync can provide liability quotes from up to 10 insurers in a matter of minutes.  Alternatively, you can book a review with one of our insurance gurus at a time at suits YOUR diary.

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