Public Liability Insurance

Public Liability Insurance

You didn’t mean it to happen, but it did, and not a banana skin in sight.

Every day things go wrong, you do damage or cause loss to a member of the public, or even injury. Unfortunately, these types of incidents are commonplace and can become very expensive. Having robust Public Liability insurance in place to protect your business is essential.

So, what is Public Liability Insurance?

Most people in business will have come across public liability insurance whether you are a sole trader or a much larger entity, the chances are that when you started your business public liability was the first cover you bought.

For many though it can be as clear as mud, what it covers and how it works can be a mystery.

Public Liability Insurance provides cover against situations where you have been negligent or there have been allegations of negligence, just because an incident has occurred doesn’t always mean you have been negligent, it's times like this that you need expert legal defence on your side.

Having insurance in place means it isn’t so much your problem, it’s your insurer who will deal with the claim on your behalf.

In essence, having Public Liability Insurance in place means that if you cause damage to property, loss, or injury to a member of the public you will receive not only legal assistance and defence but should you be found to have been negligent then your insurer will also pay any compensation up to the indemnity limit on your policy.

You have something called an indemnity limit, what is it?

Just buying public liability insurance without understanding the why’s or what’s doesn’t necessarily end well, it’s wise to have some reasoning behind the amount of coverage that you purchase.

Let’s explain, you need to understand what your exposures are, digging someone’s garden isn’t the same as building a road, the risk is different and potentially so is the amount of any claim, destroying someone’s prize rose bed isn’t the same as destroying a mains cable to a factory.

Selecting your public liability indemnity limit means looking at what the costs or exposure might be if a claim occurs, is £1 million, £2 million sufficient, or is £5 million more appropriate, in many cases the limit you choose or the amount you require can be much higher?

In some cases the choice might not be yours, you might find that you are being asked for a minimum amount of cover or minimum Limit of Indemnity to work on your customer's or employers' site or at their premises, the contracting sector is a typical example of this.

Does Public Liability Cover your employees?

Public Liability Insurance covers loss, damage, or injury that is accidentally done to a third party, such as a member of the public, if your employee is responsible for the incident then cover is provided.

However it is important to understand that your employee, whilst in your employ is not a member of the public, if they suffer an injury, then that is Employers Liability and is not covered by public liability insurance.

What type of business needs Public Liability?

Every business needs cover. Public Liability is not a legal requirement though, so does your business have to have the cover?

You could sail through business life with everything crossed hoping that nothing will happen, but, if it does can your business afford the potentially costly consequences of a claim?

The cost of liability insurance claims can be enormous; even to just defend a claim against you has a significant legal cost even if the incident was not your fault. If it was and the claim is awarded against you there is then compensation together with the legal defence costs, these can run into many tens or hundreds of thousands.

Do public liability policies have an excess?

In most instances an excess would apply to the policy, this is referred to as a Third Party Property Excess. It works just the same as an excess would on your car.

The amount of excess depends on many factors, your trade, the insurer, any high-risk activities such as the use of heat at customers' locations, and other activities your business undertakes.

What is the cost of Public Liability Insurance?

How long is a piece of string, many factors come into play when an insurer calculates the cost of your public liability insurance premium. What your business does, the risks involved, remember a gardener is not the same as a business that builds roads, both might dig holes but the risks are so much different and this is reflected in the premiums.

As a broker, we are best placed to find the best products at the best premiums from our wide market access – speak to us about how we can help keep your public liability costs under control.

The Plumber, the Vase, and the watch the wet floor… too late!.

Accidents can tend to happen when you least expect them, below is a few examples of what might go wrong.

Mr. Plummer, the Plumber was asked to install a new shower in his customer's bathroom, quite a simple job that he does every day, on completion Mr & Mrs. Customer are delighted with their new shower and Mr. Plummer, the plumber goes on his way. In the early hours, Mr. Plummer gets a call, his customers are no longer the delighted people they were earlier. Water is coming down the wall, it has brought part of the ceiling down, the best Axminster is ruined and the cat is not happy.

Mr. Plummer, the Plumber has Public Liability insurance, which would pay for the cost to repair the ceiling, redecorate, and dry out the carpet.

Whilst delivering the new sofa to your customer's premises you have to navigate your way through the house, round tables, and over the finest rugs. Almost there and you hear a smash. What you haven’t realised is that on the last stretch across the room you have accidentally knocked the finest Ming Vase off its display stand.

Whilst costly, your insurer will pay for the cost of repairing the damage to the parquet floor and the replacement of the Vase.

There are many other examples, your factory reception is busy and it starts to rain, you have noticed the heavens open, and whilst having a conversation with your customer the door opens and in skates, your next customer, culminating in a crumpled heap, broken ankle and a slight concussion.

Quite obviously in this scenario, whilst you have seen the wet floor, you haven’t made any attempt to mop it or put the necessary signage to indicate slippery conditions. You have been negligent and therefore your insurer will pay the necessary compensation to the customer.

Public Liability Insurance isn’t just about getting the cheapest possible premium, it's much more than that. This is where you need a broker to guide you through the sometimes complex nature of the cover, what the terminology means, and how it works for you.

Speak to us at Sills Insurance, we are experienced commercial brokers, we’re not a call center and we are very happy to provide advice, we don’t leave you to fend for yourself.