What is public liability insurance, and how does it work?

Public liability insurance is a type of insurance that is available to business owners. It safeguards you in the event that a client, a customer, or a member of the public takes your company to court. If your company is sued, public liability insurance will pay for your legal defence as well as any compensation or settlement money you must pay.

The NHS may seek reimbursement from you for medical treatment and transportation if someone is harmed on your business premises or as a result of your business activity. In these circumstances, public liability insurance should cover your expenses as well.

Any injury to you or your employees is not covered by public responsibility. It also won't cover you if you're sued by an employee; employers' liability insurance, which is a legal necessity if your company employs more than one person, will.

It covers the costs of legal action and compensation claims brought against your company if a third person is harmed or their property is damaged while on your property or while you are working in their home, office, or business.

This includes the cost of medical care and transportation spent by the NHS if they make a claim against your company after an accident.

Is it necessary for me to have public liability insurance?

Public liability insurance isn't needed by law, but if you operate a business, you'll almost certainly need it. If someone else sues your company, public liability insurance will cover your expenditures – yet without it, unanticipated legal costs might ruin your company.

If your business includes dealing with the public, such as a barbershop, a grocery store, or a café, public liability insurance is very necessary. If a consumer is injured on your property, they may file a lawsuit. You won't be stuck with the price if you have public liability insurance.

Even if your company doesn't have a physical location, you may still need public liability insurance. If you're a consultant, you might harm a client's property by accident when visiting them. Even if you sell things from your house, there's always the possibility that a customer will sue you.

Your clients may require public liability insurance before hiring you in several instances. If you're a live performer, for example, venues may need you to be insured before allowing you to use their space.

What level of public liability insurance do I require?

The amount of public liability insurance you require will be determined by the nature of your business. If your business is low-risk – for example, if you work from home and don't deal with the public – you'll probably just need a small amount of insurance. If your chances of being sued are higher, you should probably purchase extra insurance for your company.

Most insurers start at roughly £1 million in public liability coverage, but you can often get insurance for up to £10 million or more. It's a good idea to learn about the industry norms in which your company operates. Larger businesses will almost always require additional coverage, but following principles might be helpful when it comes to becoming insured.

What if I'm not covered by public liability insurance?

There are no legal consequences for being uninsured, but you may come to regret it. If a customer sues your company and you don't have public liability insurance, you'll have to pay for a lawyer out of pocket. If the claim against you is successful, you may be required to pay a large compensation - and you may even be required to pay the individual suing you's legal bills.

Even if you win the lawsuit, you may be saddled with significant legal fees, which can quickly add up. You may be able to recover some of these costs from the person who sued you, but they are rarely reimbursed in full.

What does public liability insurance not cover?

Public liability insurance does not cover personal injury or property damage to you or your workers. Your standard business insurance should cover this. It also doesn't cover you if an employable Liaee sues your company - that's covered by employers' liability insurance, which is needed by law if you have more than one employee.

Your public liability insurance isn't going to cover everything. Every policy has an excess, which is the amount you must pay out of pocket in the event of a claim. For example, if you cause £5,000 in damage and have a £250 excess, your insurer will pay out £4,750 when you file a claim.