No matter how well and efficiently a business is run, sometimes accidents do happen, and to protect your business, and the clients you work for, you need to make sure you have adequate cover that meets the needs of your business.
What is Public Liability Insurance?
Public Liability Insurance is protection for your business against claims by the general public. As an electrician or plumber for example, this means a claim from a client who has suffered an injury or damage to their property, whilst you were at work. Essentially the kind of accident that would involve a client suing you and your business. Public Liability insurance would cover the cost of any compensation that needed to be paid, as well as legal costs incurred.
An Example of a Claim
You are an electrician working in a client’s home, when you drill through a water pipe and cause flooding in one room of the house, causing damage to the home and distress to the owner. Chasing an unpaid invoice is now the least of your worries!
In a situation like this, you, as the business owner would be liable. If the case went to court you would be required to pay significant legal costs, and if the customer won the case, you would be required to pay compensation to cover the damage caused to the property. If you have Public Liability Insurance, the legal costs and the compensation would be covered, requiring you to only pay the excess on the policy.
How Do I Choose a Suitable Level of Cover?
Consider What Needs Protecting - All insurers offer different levels of cover depending on the kind of work your business does. Try and select the right level of cover and features of your policy, for example, some policies don’t cover you for heights over 10m, however if you know you and your team will work at those heights, it’s essential to have that in your policy in case an accident is caused.
Select a Realistic Excess - It’s tempting when you’re taking out Public Liability Insurance to set the excess as high as possible to get the cheapest possible premium, however you need to think realistically. If you needed to claim against the insurance, what amount is realistic for you to pay out, without it having a detrimental effect on the financial security of your business.
Check for Exclusions - Insurance policies can sometimes come with hidden exclusions, which, if not checked, might mean you’re not covered when you’re carrying out certain types of work. Limitations such as an asbestos exclusion or a hazardous location exclusion are often hidden within the small print, however it could be that you need to work in these locations, so make sure you check before you purchase.
Who Do I Choose to Go With?
As well as spending time considering all the different aspects of your policy, you should take the time to research the company you’re insuring with. Read reviews online, research when the company was established, and speak to fellow tradespeople to get recommendations, just so you know the company you’re spending with have an excellent reputation.
ComparetheMarket.com, and other price comparison websites are great for quickly comparing policies to get an idea of price. At a glance you can see the level of cover offered, the cost and the extra benefits you may get as part of your package.
How Much Does Public Liability Insurance Cost?
Costs vary hugely depending on the size of your business and the level of cover that you require. You can add or remove different covers when deciding on your policy to ensure you’re only paying for what your business needs. Standard policies tend to cover claims up to £1 million pounds, which may seem high but if the worst happens, and you’re required to pay legal expenses and hefty compensation, you’ll be glad you’re covered.
What Would Happen if I Didn’t Buy Public Liability Insurance?
Public Liability Insurance is not a legal requirement however it is seen as good business practice. You also need to consider that certain companies and customers will request to see a copy of your certificate before work is carried out, so you may find you lose work without the cover. You also need to check as some companies require you to have a certain figure covered in your policy, for example, £5 million, anything below this and you won’t be allowed to work there.
What is Employers’ Liability Insurance?
If you’re looking in to Public Liability Insurance, you’ve probably seen information about Employers’ Liability Insurance. If you are not a sole trader, and employ tradespeople, it is a legal requirement for you to have Employers’ Liability Insurance. This works in the same way as Public Liability Insurance, and the same considerations apply, however this insurance is to protect you and your employees if they have an accident whilst at work.
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