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How do I choose the right level of Public Liability Cover?

Rhino Trade Insurance 21 April 2023

You may be aware of Public Liability Insurance; you might even already have a policy. But do you fully understand what it includes and if it is the right level of cover for your trade business? People often think of insurance as a means to an end. The renewal comes up once a year, you search for the cheapest option, and that's it. 

We're here to provide you with a quick overview of the value of Public Liability Insurance for self-employed professionals. How is it beneficial to your company? What potential issues may arise whilst you conduct your work, and why should you ensure you have the correct cover level? Let's find out all this and more. 

Understanding the purpose and benefits of Public Liability cover

The success of your business could hinge on having suitable Public Liability Insurance. This is because it safeguards your finances if your work causes injury, accidental death or damage to property owned by a third party. Public Liability is the launchpad to every other type of trade insurance that we offer. 

In the event that you need to make a claim or incur legal costs, this insurance will defend you. Keep in mind, though, this depends on the level of protection you choose to purchase.

Risks are just around the corner on a trade site, and Public Liability Insurance is there to protect you and your company if an accident happens. Your peace of mind will be boosted by having the right kind of insurance coverage to ensure your business's livelihood.

In short, Public Liability Insurance protects your company from the expense of a third party (individual or corporate) launching legal action against you for injury, death, or property damage. This policy, which is the most typical type of trade insurance, will pay for any necessary legal fees and compensation fees owed up to the maximum indemnity selected.

Assessing your business needs and potential liabilities

Your circumstances will determine how much insurance you require. The following examples represent some (but not all) of the potential influences.

The size and scope of your company

Are you a limited company or a one-person band? What is your annual turnover? If you are balling like Elon Musk or enjoying the fruits of your labour as a small business owner, each situation brings various risks affecting your cover levels. 

Interaction with the Public

If you work with or around the public, such as on building sites or in housing estates, you have a higher chance of a third party suing you if an accident happens.

Using hazardous substances or dangerous power tools

Regular use of equipment like a circular saw, power drill or chainsaw will be extremely risky to property and people around you.

What kind of work do you do?

Tradespeople work in a dangerous industry which has been found to have far more accidents and fatalities than any other sector in the UK. Being a Builder, Electrician, Plumber or Carpenter is risky business and contributes to the level of cover needed. 

Your history of claims

An insurer will need to know more about your degree of risk from your history within the trade. If you have had several claims, your work represents a certain level of risk which would need sufficient cover to protect against. 

The exact insurance policies your business would like to take out

For instance, in addition to Public Liability Insurance, your trade business might also wish to incorporate its Tools, Legal Expenses or Employers' Liability Insurance coverage.

Exploring different cover options and levels

Insurance companies typically offer different levels of coverage. They are usually £1 million, £2 million, and £5 million, which are the most common for small businesses and tradespeople. These numbers reflect how much your insurer could pay if a claim were approved under that policy.

You may be given the option of paying lower rates for smaller levels of cover, but you shouldn't make your decision only on price because you run the risk of being underinsured. 

How to decide the right cover for your trade business?

One of the first things you can do if you need help making a decision is to contact a professional trade organisation or group you are a member of. Some trade associations have a minimum level of coverage required for members to join. For instance, at the time of writing, the Association of Plumbing and Heating Contractors enforces at least £2 million in protection for all its members. Alternatively, the association might be able to advise you on what would be best for your company.

You could also consult others who work in the same field. Although this is great, and the camaraderie element helps build bridges, we recommend getting an idea of the market, and that's it. This is because every trade business will be different, and policies are tailored to fit each tradesperson's needs. 

The amount of insurance cover you must have may also be specified in certain contracts you hold. For instance, government and local authorities typically demand that their vendors and contractors carry Public Liability Insurance of at least £5 million.

How to choose the right insurance provider

If you own a small business, the amount of protection that comes with Public Liability Insurance may seem excessive, and determining whether you need £2 million in protection or £5 million may seem confusing. However, remember that if someone launches legal action against you, they might demand payment for things like lost wages, medical expenses, and ongoing care, which can be very expensive. Legal Expenses are also covered by insurance, which can quickly add up.

Generally speaking, how much protection you'll require will depend on your trade business. You'll require a greater amount of insurance if your company is high-risk. This could be due to the potentially hazardous products or equipment involved. Still, it could also be because it brings you into regular contact with the general public, which most tradespeople do. Less insurance may be required to safeguard lower-risk firms. Therefore, £1 million may be sufficient if you only frequently interact with clients or consumers.

We are eager to hear from you so that we can go over the advantages of having each level of cover in place. Thanks to our team of qualified insurance wizards, with many years of experience in the sector, Rhino Trade Insurance can provide expert advice and guidance while granting some of the best cover on the market. We don't bite, contact our team today or get a quote online. 

Why choose Rhino Trade Insurance?

The Rhino Trade Insurance team has worked hard to develop the most effective trade insurance at the most competitive rate on the market. We can cost up to 40% less than our rivals in the same space. 

Our team not only thrives on providing high-quality insurance for tradespeople, but we also make purchasing a policy simple. You can get a quote in less than a minute and be back on the job. 

Call Rhino Trade Insurance at 0116 243 7904 or contact us right away for all the information you want. Find a price in a flash here.


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