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Public Liability Insurance Explained for SME Owners

Public liability insurance is one of the most important forms of business insurance cover.  It’s designed specifically with third parties in mind and is available for most people who interact with a business in any way, including customers, clients and members of the public. 

If a third party suffers an injury due to your work or business, public liability insurance should protect you and your business from heavy compensation pay-outs.  This insurance also covers damage to third party property so you can insure for issues that are likely to affect your business, whatever sector or business you’re in. 

In most instances, the insurers will pay the legal costs associated with defending a claim, which takes the pressure off SME owners if a claim goes to court.  Without this type of insurance, your business could end up in serious debt in the event of a claim, or if the compensation pay-out is a large sum, the claim could lead to bankruptcy for you and your business.

What Does Public Liability Insurance Cover?

Public liability insurance covers instances where a third party takes legal action against a business and the claims are diverse.  The two most common types of claim are as follow:

Slips and Trips - many business owners are in dread of a customer tripping or taking a fall at their premises.  It’s the most common cause of compensation claims and could damage your business financially.  There’s an army of solicitors who operate on a no win, no fee basis who are eager for business and willing to bring a claim against you. 

Whether your business is a building site, a small shop or any other type of business, there are trip hazards everywhere and even the most careful business owner will find it challenging to make sure that customers cannot trip over an item of stock or equipment.  Public liability insurance can cover the costs following such an unfortunate incident.

Damage to Property – this is the tradesman’s worst nightmare.  Causing damage to a client’s property whilst carrying out work on the customer’s premises is a huge worry for all types of building contractors and tradesmen.  Whether the damage is to a worktop whilst installing a new kitchen appliance, the shower cubicle whilst installing or fixing the shower, a rogue roof tile slipping and damaging a vehicle, public liability cover will save your business from the compensation costs.

What’s Excluded from Public Liability Cover?

Depending on the type of work you do, public liability cover may contain unique exclusions that vary according to a range of factors, so make sure you read your quote documents thoroughly before signing so that you don’t get caught out.  Although exclusions vary, your policy won’t cover the following as standard:

  • Damage to your own property
  • Defective workmanship
  • Deliberate acts of damage or injury.

It’s vital to remember that public liability insurance will not cover your employee, including part-time, temporary or placement staff.  All employees should be covered by employer’s liability insurance.