A Quick Guide to Public Liability Insurance
Most businesses will have public liability insurance for peace of mind, as causing accidental damage to someone or their property is always a possibility. High-risk businesses such as, scaffolders, hauliers and construction workers have even more reason to make sure they’re covered. Working with large machinery and at height increases the risk of accidents and potential injuries. Should the worst happen, you don’t want to bankrupt yourself having to pay legal fees. Public liability insurance is key to protecting your business, especially if your line of work is considered high-risk. Many commercial vehicle insurance companies will have an option to take out a public liability policy if you feel this applies to you.
Is public liability insurance mandatory by law?
By law, as a business in the UK you are only required to have employer’s liability insurance. This covers you in the event that one of your staff suffers injuries or a fatality whilst doing their job. But this won’t cover you if something happened to a member of the public or their property. For example, you’re a scaffolder and something falls and crushes someone’s car. Without scaffolding public liability insurance, the person would take your company to court and you’d have to pay out of your own pocket. This certainly isn’t the ideal scenario which is why it is a good idea to take out a public liability insurance policy to keep your business budget secure.
How will it benefit my business?
Taking out public liability cover will not only give you peace of mind as a business owner, but it will keep your company secure from bankruptcy in the event of an incident. You’ll know that you’re safe and in the clear if anything were to happen and you wouldn’t have to fork up out of your own pocket for damages.
Using best practice is really beneficial for the reputation of your business across all areas. Taking the necessary precautions presents you as a business that cares about health and safety and is responsible for itself. Imagine your customers getting wind of an unresolved legal dispute due to you damaging a customer’s property. It certainly wouldn’t look good for your reputation as a business, so it’s always better to be proactive than reactive.
Trade bodies and associations for your industry sector will usually have particular guidelines for the level of business insurance cover they require for valid membership. It is crucial to check that you meet these standards in order to join or continue membership with these organisations.
What are my cover level options?
The standard cover for public liability insurance ranges from £1 million to £10 million. How much coverage you want will depend on the size of your business and the nature of your work. You can get cheaper premiums if you opt for less coverage but a lower level of protection could leave you with a hefty bill. For a small business, the amount of cover offered by insurance companies could seem extremely high. But, if a third party were to make a claim against your business, they could require compensation for loss of earnings, medical costs and on-going care which will add up. On top of this, legal fees can mount up quickly and public liability insurance can cover you for this as well.
What level of cover should I get?
The amount of cover you’ll need will depend on your business. If your business is high-risk, then you’ll need a higher level of cover. High-risk means if your work involves potentially dangerous materials or equipment and if you are in frequent contact with members of the public. An example would be a delivery fleet or a scaffolding company working at height with dangerous machinery.
If you’re a café owner and someone could potentially trip and injure themselves on your premises, then you probably need a lower level of cover than a company which owns a fleet of HGV lorries delivering across the UK. This is due to the increased risk added with using large machinery and the increased potential contact with members of the public.
It is important to check with your insurance provider what you are and are not covered for before you commit because every policy is different. Your policy can be tailored to your business and the potential risks specific to your line of work. It is always best to cover all the risks your business presents so that you are sufficiently covered. If you feel you are lacking cover in any areas, it is essential that you flag this up and make the necessary changes to your policy as soon as possible.
How can I check whether I have the right cover?
You can always check the level of cover you need by referencing what levels your local authority advises. Alternatively, if there’s a trade body or association for your area of industry, they may have guidelines in place for how much public liability cover you are expected to have. This way, you can be sure you’re keeping up with your industry’s standard level of cover.
How do I save on cost?
You can often make some savings by combining multiple layers of cover under one policy. For example, you could combine your public liability insurance with product liability if you have a fleet of vehicles delivering products to the general public. Most commercial vehicle insurance companies will offer multiple options of cover on one policy for businesses and this may lower the overall cost for you.
To further reduce the cost of your policy you can do so by reducing the level of risk. You could implement measures such as a burglar alarm and CCTV to keep business property secure or schedule regular health and safety staff training to reduce the risk of accident and injury.
These six considerations should help serve as a quick guide to public liability insurance. If you’re looking for business insurance for your fleet, please do not hesitate to get in touch today. Give us a call on 0333 577 0331 or contact us.