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What Does Public Liability Insurance Cover?

Public liability insurance is a relatively common business insurance cover, which covers legal liability if you or an employee is held responsible for property damage, injury, or death befalling a member of the public as a result of your business activities.

For instance, if you run a cleaning business and you or an employee forgets to put out a ‘wet floor’ sign, which results in someone slipping and hurting themselves or damaging their property, you could find yourself hit with a lawsuit.

Similarly, lawsuits could follow if an electrician installed faulty wiring, a hairdresser spilt dye on a client or their property, or a customer suffered injury while visiting your premises.

In that kind of situation, public liability insurance could cover legal fees and compensation, the value of which will depend on your individual policy, arising from a claim for damaged possessions, bodily injury or death to a member of the public, whether they’re a customer, supplier, contractor or simply a passer-by.

What Kind of Costs Does Public Liability Insurance Cover?

Typically, public liability insurance will cover the cost of repairing or replacing possessions, NHS hospital costs, legal fees arising from defending a claim, and compensation awarded to the injured party.

The level of cover is important too, as your policy will only cover costs up to the limit of the policy you take out. The options usually range from £1 million up to £10 million, so think carefully about things like the size of your business, the level of risk associated with your work, and your level of involvement with the public before deciding how much public liability cover you need.

In truth, it is best to seek advice from a specialist business insurance broker who can help to assess your risk and recommend the right level of cover.

Do I Need Public Liability Insurance Cover?

While public liability insurance is not a legal requirement, it can be seen as playing an important role in defending against the unexpected, and protecting them against the unforeseen cost of legal action and compensation. Equally, some customers may insist you have public liability cover in place before awarding contracts, while some trade bodies may insist on it too.

Whether or not you take out public liability insurance is up to you as a business owner. But before deciding whether you need public liability insurance, it’s important to consider whether you could afford the time and expenses associated with defending a claim if you don’t have this insurance in place.

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