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Who needs public liability insurance?

Public liability insurance is for any business that physically operates with, interacts with or is frequented by members of the public. It provides coverage from claims made by third parties due to accidents, damage, or incidents that occur where you work, whether on your premises or your customers’ premises.

For most businesses, there are several insurances required to ensure safe and legal operation. Depending on the type of business your own, you may need to have policies such as general liability insurance and product liability insurance to protect you from claims, legal proceedings, and compensation payments.

According to NimbleFins, public liability insurance may be needed whether your business is a private limited company, a public limited company, a partnership or you are a sole trader. There is no limit on the size of the business, large or small, that should have public liability coverage.

Likewise, the need to have public liability insurance is not influenced by the number of employees or clients that you have or is affected by the amount of money your business earns or turns over (although these factors may affect your insurance premium).


When is public liability insurance required?

For businesses to operate, while some insurances are required by law, public liability insurance is not one of them. Legally speaking there is no requirement for a business to obtain coverage of this type, and not having it will not result in penalties or legal ramifications.

Even though it is not a legal requirement, many businesses will have a public liability policy to protect them from expensive claims. Large corporations and smaller companies understand that claims can be costly, and have public liability insurance to cover their financial responsibility. There may also be other people or entities that require your business to carry this kind of insurance.

These can include:

  • Members of the public
  • Clients
  • Partners
  • Government offices
  • Local authorities

Often there are instances where a client demands that insurance is in place before work is undertaken on their premises. Having public liability in place guarantees that the client and their property are covered in the event of any accidents or damages. Government and local authorities often require coverage and have strict requirements on limits and coverage. If you perform work for these kinds of regulated businesses they can ask for proof of insurance and may perform annual checks to ensure your policy is active.

In many cases, there is also an expectation from the public that insurance will be in place. Again while this is not a legal requirement, it may influence members of the public when choosing companies to do business with. For example, it is expected that restaurants or food outlets will have appropriate public and product liability insurance cover should there be an incident of food poisoning. Customers will expect that they will be able to claim compensation.

If the business is uninsured, such claims will be leverage against the company and costly expenses or settlements will need to be paid from personal finances.


When do I need public liability insurance?

If your business involves interacting with the public either at your business premises or your customers’, then it is prudent to invest in public liability insurance. Any damage to a person or property resulting from negligence can leave you liable for large settlement sums and legal fees.

For any business that is frequented or visited by members of the public, liability insurance is a sensible way to protect finances and assets.

Types of business that would benefit from insurance coverage include but are not limited to:

  • Shops and supermarkets
  • Restaurants and cafes
  • Home Services (electricians, plumbers, etc.)
  • Accountants office
  • Medical offices
  • Food trucks
  • Landscape gardeners
  • Caterers

It comes as a surprise to some business owners to learn that they still need public liability insurance if their company is home-based. Should clients come to your location, you can still be exposed to claims. If a customer visiting your home for an appointment slips and falls down the stairs resulting in an injury, you can be liable.


What is a public liability insurance certificate?

Once you have your public liability insurance policy in place you will be issued an insurance certificate. This is your proof of coverage and will be the document that can be shared with clients or other businesses that require it. Usually, the certificate is displayed in a visible place at your business location. Digital certificates can be used, shared online, or displayed on a business website for clients to view.

A public liability insurance certificate includes information about your policy and coverage limits and will detail items like:

  • Company name
  • Business description
  • Insurance period
  • Policy number
  • Policy terms
  • Coverage exclusions
  • Indemnity limits

Certificates may also include details of regional restrictions and other coverage exclusions that are not covered by the policy.

Public liability insurance policies can range in value from £1 million to 10 million pounds for readily-available policies, depending on the size of the business and the amount of cover needed.