What is a Public Liability Insurance policy?
Public Liability Insurance provides you with cover against claims from members of the public and customers who have been injured or had property damaged as a direct result of your business activities. It will pay for your legal fees, plus the claimants’ legal fees and compensation if the courts find in their favour.
What does Public Liability Insurance cover?
Public Liability Insurance – sometimes called PL Insurance – can cover all kinds of claims made in a wide variety of work environments. In reality, it is most often used to settle claims made after slips, trips and falls on business premises.
It could be a member of the public tripping on a shop doormat that has become frayed and unsafe; a customer or supplier in your office spraining an ankle after missing a poorly lit step; or a diner slipping in a restaurant because there was no Wet Floor warning notice on display.
Claims can also be made on Public Liability Insurance for damage to personal property, typically laptops or other high value items and devices, that are held to be the policy holder’s fault.
Is Public Liability Insurance compulsory?
At the moment, there is no legal requirement in the UK for your business to take out Public Liability Insurance. However, there are many cases when clients may insist on it before they appoint a supplier.
Industry regulators and professional bodies are increasingly making Public Liability Insurance a condition for certification or membership, while most, if not all, public sector funded contracts include it as a mandatory requirement.
Apart from the professional case for taking out Public Liability Insurance there is also, the sheer expense involved in defending an uninsured injuries claim to be taken into consideration.
Even trips and slips that cause only slight bruising can trigger a ‘soft tissue injury’ claim that could cost around £2000, plus legal fees that can typically run to a further £5,000.
If more serious injuries are sustained that lead to time off work or even permanent disability, the costs to cover treatment, rehabilitation and full time care could quickly escalate to a point where your business simply can’t afford to pay them and may be forced to close down.
Why do you need Public Liability cover?
Public Liability insurance protects your business if a member of the public is injured or their property is damaged because of something you have done. If a customer falls in your premises because of ill-fitting carpet or perhaps a supplier takes a tumble in your car park as its not adequately lit, your business could be liable because you have a responsibility to make sure your property is a safe place for the public.
Public Liability in the real world:
If you wish to provide goods or services to the public sector, many councils and alike request you have suitable Public Liability in place before they will consider you for the contract.
For example Bolton Council request that a business has a minimum of £10million public liability insurance cover in place to become one of their suppliers. If you want to have a pitch at the Manchester Markets you need a minimum £5million cover for trading on British Markets.
Your account handler
As a business owner, you need to decide the level of Public Liability cover your specific business needs. This can depend on the sector you are in and the potential catastrophes you may face. When thinking about Public Liability it’s always best to think about the worst case scenario and make sure you are covered for that. Under-insurance is a massive issue and could ruin your business if you haven’t properly considered what might happen, even in your worse nightmares. – Jess Woo
What businesses need Public Liability Insurance?
Any business that deals with customers face to face, either on their own premises or as a contractor on their customers’ site, would be well advised to take out Public Liability Cover. Accidents can happen anywhere, and although they might not be your fault, the courts may decide they are still your responsibility and order compensation accordingly.
For your own peace of mind, then, and to protect your business in the event of a claim, it makes sense to have a policy in place.
Depending on the kind of business you run, the Stanmore team will help you decide what sort of PL Insurance you need and find you the right policy at the most competitive price.
If you are responsible for organising Public Liability Insurance in a large business, then your needs will be different to someone who runs their own hairdressing salon or sandwich shop.
Or, if you are a sub-contractor working on a building site, where power tools and heavy machinery increase the accident risk, you might want us to look into specific Tradesman Insurance or Self Employed Public Liability Insurance.
Whatever your Public Liability Insurance requirements, Stanmore will work harder to find you the best match.
How much Public Liability Cover will I need?
From your own business’ perspective, it is worthwhile to consider a ‘worst case scenario’ for the industry you work in. You may find that some clients require you to have a certain level of Public Liability Insurance Cover before they work with you, to protect themselves and their customers.
An additional important consideration is the recent changes to the “Ogden Discount Rate”. This is the rate which is used to calculate insurance settlements in respect of life changing injuries and the changes made mean that payments made by insurers will be substantially higher and consequently your own ‘exposure’ may have increased. If a life-changing accident occurred on your premises and you were at fault. The sum paid to the claimant is now significantly larger than pre-2017. This is because the interest figure used when working out the overall all lifelong amount a claimant is to be rewarded was reduced from 2.5% to -0.75%. Although the Ogden Discount Rate changed again in July 2019 to -.025%, this will only make differences in claims costs in the hundreds of pounds, so careful consideration of the limit is vital.
If you need any guidance on this we would recommend talking to our team to get exactly the right advice.
Talk to Stanmore the insurance people about Public Liability Insurance now – call our team on 01204 570 370