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PUBLIC LIABILITY INSURANCE - ALL YOU NEED TO KNOW

Davina Chohan 06 March 2020

WHAT IS PUBLIC LIABILITY INSURANCE?

Public Liability Insurance is one of the most common types of business insurance. This valuable protection covers compensation and legal costs if a member of the public including clients, suppliers, or even those who may interact randomly with your business such as passers-by, decide to sue your company because they have been injured, or their property has been damaged, as a result of your work.

Importance of public liability insurance for businesses

Public Liability Insurance is so important because of the high likelihood of insurance claims from third parties coming your way during the course of your work.

If you don’t have Public Liability Insurance, you’re leaving yourself vulnerable to the potentially huge costs that come with legal claims. Who can afford to shell out thousands, tens of thousands, hundreds of thousands – or even in some cases millions of pounds – following a legal claim? Depending on your business structure, you could even put your personal assets at risk by going uninsured.

Further, an uninsured trade business is an undesirable trade business. No sensible customer will want to work with someone without insurance, because if something goes wrong then the business isn’t guaranteed to be able to put things right. So, having Public Liability Insurance not only helps protect your finances in case of legal action, but it also offers potential customers that extra reassurance that you’re operating compliantly.

Examples of scenarios covered by public liability insurance

So, let’s look at some scenarios which would be covered by your liability insurance coverage.

  • During their lunch break, a joiner leaves some tools on the landing in a customer’s home. The customer trips over the tools and falls down some stairs, leading to a broken ankle. The customer makes a claim against the joiner, and is successfully awarded compensation of £3,000, with the solicitor’s bill of £1,500 also being sent to the joiner.
  • A plumber fits a new power shower but makes a mistake. There is a flood in the property which damages flooring, walls and the homeowner’s personal property. The homeowner makes a Public Liability claim and is awarded £7,000 in damages, which the plumber must pay.
  • An HGV driver backs up too far into a warehouse and sets off a domino effect of shelves crashing to the ground. The damage is assessed at £250,000 and the HGV driver is liable for all of it.
  • A caterer provides food for an event. Unfortunately, due to incorrect storage, a customer contracts a food-borne illness and dies as a result. The caterer is found liable and must pay £2M to the victim’s family.

As you can see, having Public Liability Insurance is absolutely vital to avoid having to cover such costs yourself.

WHAT DOES IT COVER?

Our Public Liability Insurance protects you if a client, member of the public or visitor suffers an injury or damage to their property because of your business. It will cover legal expenses and/or compensation (up to your chosen level of cover). Rhino offers cover levels of up to £1M, £2M, and £5M.

Exclusions and limitations in coverage

There are some important limitations you should know about with Public Liability Insurance.

Public Liability Insurance won’t cover claims brought against your business for personal injury or property damage by any employees you may have. For this, you would need Employer’s Liability Insurance.

Public Liability Insurance doesn’t cover personal injury or accident to you. To protect yourself in this area, you need Personal Injury and/ or Income Protection Insurance.

Public Liability Insurance doesn’t extend to your personal property getting damaged. Consider Tools Insurance and Van Insurance to protect your personal assets.

Public Liability Insurance doesn’t cover partially-completed building works and job sites. Contractors All Risks Insurance would be a good policy for this.

WHO NEEDS IT?

Absolutely every self-employed individual needs Public Liability Insurance. Whether you’re a self-employed sole trader, limited company or partnership, Public Liability Insurance is one of the most relevant insurance policies for you. Whilst there is no legal requirement to hold the policy, it is a fundamental business insurance policy to protect your business.

How much Public Liability Insurance Do I need?

When deciding how much Public Liability cover you need, it’s best to play it safe. You should assess the risks that come with your particular profession, but remember that even an industry as seemingly safe as catering can see huge claims (see example above). At Rhino, cover limits vary from £1M to £5M, and you can get even more if you consider your business particularly high-risk.

We don’t often advise a negative outlook here at Rhino, but when it comes to insurance for public liability, the key is to imagine the worst-case scenario. Would you have enough insurance to cover the worst happening?

Speaking to the friendly experts at Rhino HQ will give you a clear idea of how much Public Liability cover you’re likely to need, to give us a shout today.

HOW MUCH WILL IT COST?

Rhino’s outstanding cover starts at just £6.07 per month.

However, the cost of Public Liability Insurance will be dependent on the type of business you run and the level of insurance that you require, just like with most types of insurance. If your business carries out lower risk activities, you will pay a lower price however if your business is perceived as higher risk, you are likely to pay more.

Your claims history will also be a factor. If you’ve made lots of claims in the past, you’re likely to be considered riskier to insure and your premium will be higher.

Remember, your coverage limit will also affect the premium you pay.

We can provide your business with an instant quote today!

IS IT A LEGAL REQUIREMENT?

Public Liability Cover is not a legal requirement. However, it is worth considering Public Liability Cover as financial protection for yourself, in case of a situation where someone decides to make a claim against your company for damage to their property or injury. You may find some clients may prefer for you to have this in place before they work with you.

HOW CAN I GET PUBLIC LIABILITY INSURANCE?

You can take out our Public Liability Insurance quickly and easily online with Rhino. Our Public Liability Insurance allows you to design your policy so that it meets your specific business needs. You can also choose to take out our Public Liability with a range of covers as part of your tailored package. After a few simple questions about your business, we will give you the best premium suitable for you. Need more help understanding Public Liability Insurance? Give us a call today on 0115 350 1545.


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