Public liability insurance protects you against claims made by a customer, a supplier or another member of the public for injury or damage caused by your business.
If your business is found liable for causing an accident - for example, if a customer slips on a wet floor in your shop - your public liability insurance can cover legal fees and compensation payments.
Compensation amounts may take into account the cost of repairing or replacing the injured party’s property, lost income and medical fees. You can usually choose a cover level of £1 million up to £10 million, based on the risks that your business faces.
You should also check your client contracts, as they will sometimes specify a minimum level of cover. Usually a higher level of cover will mean a higher premium, but it will also make it more likely that you’re fully covered if you come to make a claim.
When you get a quote for public liability insurance, you will be asked questions about the type of work you do to determine the scope and price of your policy.
For example, if you have a building company you may be asked whether you work at height and whether you carry out demolition work, as these factors could affect how much your public liability policy costs.
You may also be asked some questions about your claims history and your financial situation, as these things can also be taken into account when the insurer is calculating the cost of your policy. You should answer all questions as accurately and fully as possible, as otherwise you may not be covered if you claim.
Taking precautions and running your business as safely and carefully as possible will lower your chances of needing to make a claim and may even decrease the cost of your public liability insurance.
The best way to find out how much your public liability policy will cost is to run a quick business insurance quote. You can buy public liability insurance on its own or add other covers to create a tailored business insurance policy.