A Quick Guide to Choosing a Public Liability Insurance Policy

Insurance certainly isn’t one of the more exciting aspects of running a business and it’s one that a lot of people are a bit unclear on, but it’s important that you get the right kind.

Today we’re going to be taking a look at public liability insurance, who needs it and what’s right for you.



What is Public Liability Insurance?


Public liability insurance (PLI) is a form of insurance cover which covers sums that you are legally liable to pay as damages and expenses in the event of things such as accidental injury to people other than your employees, damage to material property, obstruction, trespass and nuisance.

Generally speaking, PLI usually covers any damage that you cause to another person or their property through your own negligence.


Do I Need It?


Unlike some forms of insurance, you’re not required to have public liability insurance by law, although it is usually taken out alongside the likes of employer’s liability and products liability insurance as a package.

PLI can be purchased by businesses both large and small, and it’s generally recommended that any business which comes into contact with members of the public on a regular basis has it.

Claims for public liability can result in damages of thousands of pounds, so it’s something that you really should be covered for.

Sometimes a client or company may choose not to work with you if you don’t have PLI in place.

For example, subcontractors are often obligated to take out public liability insurance by their main contractor as a condition of their contract and will usually stipulate that the subcontractor purchases the same level of cover as themselves.


Limits of Indemnity


Most PLI policies have a minimum limit of indemnity of £2,000,000 any one occurrence, although if you work for a local authority it can be even higher, in excess of £5,000,000 in some cases.

The limit of indemnity you choose will depend on your business, and the potential to cause lifelong injury, as while you may never think these kinds of things are going to happen, they can be very, very expensive when they do.

According to ConstructAQuote.com, the recommended level is usually around £1,000,000 to £5,000,000, but if you require more cover, it can usually be arranged.

When you do come to take out PLI, be sure to be very clear when describing your business and declaring your business activities.

For example, there may be some one-off jobs that you don’t carry out all that often that are far more dangerous than your average day to day work, and if these aren’t declared, then you could be refused a claim.

Making sure you have adequate insurance for your business is crucial and it gives you the peace of mind to let your insurer worry about any problems, while you crack on with the things that you’re good at.

For a roundup of some of the other types of insurance your business may need, check out this post from Entrepreneur.