Understanding Public Liability Insurance and Why You May Need It

Public Liability Insurance is sometimes confused with Employers Liability Insurance, they are not the same thing and confusing them could cost you dearly.  Employers Liability Insurance is the only mandatory business insurance under UK law.  It is required even if you just employ one person.  It protects you against the cost of compensation claims should a member of your staff get ill or injured whilst working for you. It doesn’t provide cover should your business activities injure a member of the public.

Public Liability Insurance provides a business with protection against claims from the public.  It covers you for incidents on your business premises and for events and activities you’ve organised and will pay for compensation, the cost of repairing damage, legal fees, expenses and hospital treatment costs which can be recovered by the NHS.  Though not compulsory, this insurance can be a very important safety net for businesses, new and established, ranging from self- employed individuals, such as hairdressers, through to large businesses.

How much this insurance will cost will depend on the size of your business and the level of risk, generally, manual businesses are seen as higher risk than clerical businesses.  You should always compare insurance terms and offers before opting for cover but remember, it is treated as a business cost by HMRC and therefore it is tax deductible.

You should seriously consider taking out Public Liability Insurance if clients visit your business premises, even if those premises are your own home.  You may regard the possibility of accident or injury highly unlikely but consider how easy it would be to spill coffee over a client’s laptop or for a visitor to trip and sustain a serious injury.  If your business involves working on client sites such as offices or their home, you should consider the potential for damage to their property or injury to their person.

If your business involves you working in a public environment, you need to consider the potential for injury or damage to the person or property of a third party.  Take for example a window cleaner whose ladder falls into oncoming traffic and causes an accident, or a stone carver involved in restoration work whose chisel falls onto a crowded pavement below.

Public Liability Insurance could also be a wise precaution if you are hosting a private party, it would cover you for legal fees, medical expenses, compensation to individuals or damage to the venue.  An event for which few people would consider the need for Public Liability Insurance is a wedding.  It’s a happy event and the last thing its organisers want to think about is things going wrong, but they do.  Someone has too much to drink, a fight breaks out, there’s a physical injury and damage to the venue.  The last thing you want to be doing on your honeymoon is dealing with a compensation claim.  In answer to the question ‘Who needs Public Liability Insurance?’ the answer has to be ‘A lot more people than realize it’.


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