Understanding Public Liability Cover: Don’t Risk being exposed to PL Claims
Despite every organisations best efforts to eliminate risks, accidents can still happen. A Public Liability Policy can cover potential claims against you. Don’t risk being exposed and find out what is and what isn’t covered under your Public Liability policy.
A Public Liability policy can cover you for claims brought against you or your business for property damage or bodily injury that you may have caused.
For example, without a Public Liability policy you could be held responsible for all the legal and damage costs awarded to your client if you had caused bodily injury or property damage, which could potentially bankrupt you if you don’t have cover.
What level of cover should I consider?
A small business should have at least £1000.000 but if you work in higher risk areas or work for local authorities, railways etc. you may need £5 - £10million.
Think you don’t need Public Liability? Think Again…
“I am self-employed and work mainly from home so I will not need a Public Liability policy”
FALSE
Whether you work at home or visit clients you can be held responsible for any accidents caused by you.
“My PL policy will cover injury to employees”
FALSE
Claims made against you by someone you employ is not covered by your Public Liability policy. You must have an Employers Liability policy in place which is required by law. You can be fined £2500 a day if this is not in place. It is also a criminal offence.
“My business is so small these type of claims won’t arise”
DON’T BE SO SURE! If you come into contact with clients you are exposed to a Public Liability claim, whether you’re a one-man band or not.
Do you need Public Liability Insurance?
Although Public liability is not compulsory, without it you immediately expose your business to high risks and possibly personal liability. In general, it is a low cost for SME Businesses, and protects you and your company against damages and legal costs.
We recommend Public Liability Insurance especially for shops, tradesmen, architects and accountants, but all organisations should consider their exposures whilst using third party equipment, or whether they could cause accidents to/on third party property. Even the smallest of scratches could lead to hefty fines and if the case was to go to court you could be required to pay expensive legal fees.
A YES to the questions on the right indicates you should consider a Public Liability policy.
Does your business come into contact with clients or members of the public anywhere anytime?
Could your business cause injury to someone or damage to property?
Do your clients require you to sign contracts requesting Public Liability cover?
Do your clients ask you for proof of Public Liability cover?
Case Study – PL Claim Example 1
You decide to take a marketing stand at your industry’s big trade show to get some publicity for your firm but during the show a bit of the stand falls off the stand and injures a passer-by. Not just an embarrassing episode, but a potentially costly one if that person decides to sue.
Source:
Hiscox
Case Study – PL Claim Example 2
Whilst working on a construction project a parked car is damaged whilst you are moving your equipment. The compensation amount would probably be based on the repair or replacement cost of the vehicle.
Source:
Hiscox
When you’re not covered under Public Liability
A Public Liability policy won’t always be enough to cover you in certain situations, so it’s important to consider when you may be risking exposure to another type of claim.
This case study illustrates when you might not be covered under a Public Liability policy.
Don’t risk being uninsured for certain situations. Where your Public Liability policy may not cover you we recommend considering additional insurance such as a Professional Indemnity policy.
Case Study Non-PL Claim Example
A tradesman is installing a window on site. During installation he is ready to fit the window but slips and breaks the window, no one is injured. * The window was purchased by the tradesman on behalf of the company but was broken before it was properly fitted and therefore is not covered by the Public Liability policy. The tradesman has to cover the costs of replacing the window himself.
*should the tradesman have injured someone when the window was broken this would have been covered by a Public Liability policy
Complementing your Public Liability Policy
These are some of the policies PIA recommends together with Public Liability, and which are available to select when selecting the “Tradesman” insurance on the Quote & Buy platform.
Tools cover
Generally covers hand and power tools in the event of loss, damage or theft.
Plant cover
Required by law for most employers, unless you are exempt from the Employers’ Liability (Compulsory Insurance) Act. You could be fined up to £2500 a day if you are without suitable insurance.
Contract works
Covers unfixed materials and the temporary works on-site. For properties undergoing renovations only the alterations are covered. A common misconception by homeowners is that their property insurer covers the renovation works but this may not necessarily be the case and should be double checked.
Please note that it’s important to review your specific policy wordings to see exactly what’s covered.
Other Insurances to consider alongside your PL policy
Employers Liability
Required by law if you employ direct employees or labour only sub-contractors, unless you are exempt from the Employers’ Liability (Compulsory Insurance) Act.
Read more about Employers Liability Insurance.
Professional Indemnity Insurance
You could be held liable if your clients decided to claim against your business for professional advice if they believe you have caused them a financial loss (even if it’s not true). Professional Advice is not covered on a Public Liability policy. Some professionals can’t legitimately trade without a valid PI policy read more or get a quote .
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