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Top Public Liability Insurance Myths

Rhino Trade Insurance 12 April 2023

The topic of business insurance can be a tricky one. But when it comes to your livelihood, you can’t afford to make assumptions about what you’re covered for – and what you’re not. Doing so could result in losses of time, money, or even your entire business.


In this article, we’ll clarify some of the common misunderstandings about Public Liability Insurance and get you up to speed on the true importance of this cover along the way.


Myth #1 – Public Liability Insurance is compulsory


This is a common misconception. But unlike Employer's Liability Insurance, Public Liability Insurance isn't a legal requirement in the UK and isn't compulsory to hold when running a business.


Some people get confused between Public Liability Insurance and Employer’s Liability Insurance. In fact, they’re totally different policies. Employer’s Liability Insurance exists so that employers can defend themselves and their employees from lawsuits brought about by staff members. Public Liability Insurance is there so businesses can defend themselves against claims brought by third parties, including other businesses or members of the public.


Even though you may never need to claim your Public Liability Insurance, the risks in the trade industry are too great to avoid taking it out. Ultimately, getting Public Liability Insurance means you won’t have to pay for your own medical care and legal costs if a third party files a claim against your business.

Myth #2 – You don’t need Public Liability Insurance if you’ve got Employer’s Liability Insurance


This myth has cost business owners a fortune, so be careful. Remember, these are two different policies which cover different areas.


In these trying times, looking for short-term cost savings is usually a smart choice, but forgoing Public Liability Insurance because you’ve already got Employer’s Liability Insurance isn’t one of them.  


Suppose your company is sued for inflicting injury or property damage to a customer, a member of the public, or another contractor while performing your work. In that case, Employer’s Liability Insurance won’t be of any use. Instead, you’d need Public Liability Insurance to pay the legal fees and damages awarded to the claimant (up to your chosen cover level). Claims can be filed for anything from minor accidents to serious injuries and even accidental death.


Myth #3 – Public Liability Insurance covers your business anywhere


Having your trade business covered by Public Liability Insurance in the UK will only go so far. Unless explicitly stated in your Policy, you won’t be covered if you decide to work abroad. This is because your current Policy will only consider the risks posed in your home country that you informed your insurer about when you took out the original policy.


For example, if a bricklayer wanted to take a contract in Spain to build new homes, the Public Liability Policy they took out in the UK would be redundant there.


So, what should you do if overseas working might be in your future? First, you should review your current policy to double-check check they only cover you inside the British Isles. Then, contact your insurance broker and update them on your circumstances. They may be able to alter your policy, or you may need to look for specialist insurance that covers you while abroad.


Myth #4 – Public Liability Insurance protects against bad advice and negligence


Many people tend to confuse Public Liability Insurance with Professional Indemnity Insurance. They’re very different, so listen up and make sure you’re not one of those business owners getting it wrong.


Remember, Public Liability Insurance covers claims made against you by third parties which result in compensation or medical expenses. Professional Indemnity Insurance, however, will cover you in the case of claims brought against you involving gross negligence or poor advice that results in a customer’s financial loss.


Businesses looking for the most affordable insurance plans may think they only need one of these policies rather than both. This is wrong – they’re not the same policy.


For example – if a joiner installs a bespoke TV wall unit in a client's home and accidentally damages the property, Public Liability Insurance would pay for these damages.


However, if the joiner installed the right unit, but it wasn't up to the client's specifications, wasn't adequate, or needed to be fixed, Professional Indemnity Insurance would be required to cover the financial implications of this.


Public Liability Insurance vs Professional Indemnity Insurance – it pays to know the difference!


Myth #5 – £1 million Public Liability Insurance is more than enough coverage.


When it comes to Public Liability cover, tradespeople might assume that £1 million of cover is enough to protect your business. It sounds like a lot, doesn’t it?


The truth is that depending on the size of your company and the projects it works on, £1 million may be insufficient for what you could end up liable for.  


Compensation claims can add up to hundreds and even millions of pounds, depending on the severity of the incident or accident. You’ve probably seen stories in the news media about claims resulting in settlements that reach eye-watering amounts of £2 million, £5 million or more.


You’re in safe hands with Rhino. When taking out insurance with us, we’ll ask the right questions to gauge what level of risk your business poses. From this, we will tailor your Public Liability level and ensure you are covered for the right amount.


Myth #5 – Public Liability Insurance protects my tools


An often-confused matter in the world of trade insurance, some tradespeople think Public Liability Insurance covers their tools and personal effects.


This isn’t the case. Tool Insurance is a separate policy which must be bought separately or as an add-on to your Public Liability cover (don’t worry – with Rhino, it’s easy).


The difference is actually pretty straightforward. Public Liability Insurance protects your business from claims originating from damage or injury to a third party or their property. Tool Insurance protects your vital equipment, whether stolen, lost or broken or needs replacing.


Rhino Trade Insurance can offer tool cover for up to £10,000. Our tool insurance allows you to store your tools in your work van overnight (as long as conditions are met within your Policy), which our customers find pretty handy.


Why choose Rhino Trade Insurance?


We provide low-cost, high-quality trade insurance policies, which you can pay for how you like – either annually or monthly with 0% interest instalments. Our five-star rated team can advise on any aspect of insurance for your particular trade and do so without relying on jargon.


Call Rhino Trade Insurance at 0116 243 7904 or visit our website right away for all the information you need. Get a price in a flash here.


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