subject: What Is Public Liability Insurance And Why Do I Need It? [print this page] What Is Public Liability Insurance And Why Do I Need It?
Public liability insurance is not compulsory for most businesses in the UK, but most organisations have it in place and there are many reasons why this is a sensible idea. The main purpose of this type of insurance is to protect the business against claims for damage to third party individuals or property belonging to third parties. By third parties we just mean people who are not your employees and property or equipment that belongs to someone other than you or your company.
There are some businesses who may not need this type of cover, but they are very much in the minority. If you are self employed and work from home without ever going onto a client's property and never inviting clients into yours, then you probably do not need it. If you carry out work on other premises, go visiting customers or have people on your own premises, then there is a case for having some sort of basic cover in place.
If you regularly go onto other people's property to carry out your work, it would be unwise not to have some form of public liability insurance in place. There are countless ways that you could easily be involved in an incident where someone is injured or property is damaged. Imagine that you leave a piece of equipment laying near where you are working and someone trips over it an injures themselves. Alternatively, you may inadvertently cause damage to property while carrying out work, such as drilling through a water pipe while fitting something to a wall.
In some industries you will not be able to undertake much work if you do not have adequate insurances in place. Many customers require proof of liability cover before they will consider dealing with you. This is particularly so with local authorities and other public bodies, which will have more stringent policies in place to ensure that they only deal with responsible contractors. However, the requirement is becoming a more widespread as other organisations are seeking to protect themselves and their customers.
We live in a society where people are very quick to sue for damages and the potential claims for personal injuries in particular can mount up very quickly. Not least because of the legal fees involved in these often very lengthy disputes. Public liability insurance will cover you for all the legal costs of any such claims too, as well as other direct costs and compensation claims.
Because the size of this type of claim can mount up very quickly, this has a bearing on the amount of liability insurance cover you need to get. For an average small business or self employed worker, cover for up to one million pounds would not be unreasonable. That may sound quite a lot, but legal costs are substantial and over a period of time they can mount up to very substantial amounts. The fact that you need cover for that amount does not have to mean that you will pay a lot in premiums though. Cover for a million pounds is fairly standard and the premiums will still be quite reasonable, as the chances of the insurer having to pay out that sort of amount are relatively small.
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