Public Liability Insurance: Ins and Outs

Public liability insurance is often overlooked by small business owners however it is vitally important to have, especially if members of the public visit your business premises or you travel to visit them. This type of insurance is sometimes regarded as a luxury rather than a necessity but it can, in the event of an accident, save you being sued for thousands or even millions of dollars. So what exactly is 'public liability' and who should take out insurance against it?

Public Liability Insurance Definition

Public liability literally means that you are liable for all members of the public while they are on your property. You are liable for their safety and the safety of their possessions from the moment they arrive to the moment they leave. Should they have an accident while on your property, or should you cause an accident on their property then they can put in a legal claim for compensation against you personally and against your business.

This type of liability applies to home based businesses where clients visit your home just as much as it applies to large business premises and worksites. In fact, even professions such as dog walkers and house sitters need to take out public liability insurance - just in case one of the dogs being walked runs into the road and causes a major road accident.

This form of insurance covers a multitude of claims including the following:

- damages awarded to members of the public who suffer injuries or loss of property because of an accident while visiting your business premises. This also covers the pavements outside the property and in some cases the car parks as well.

- Legal fees and any other expenses that you incur while an injury or accident claim is being dealt with.

- The cost of hospital treatment, if necessary, and the cost of calling an ambulance if any injuries are serious enough to warrant one.

Each policy for public liability will be different though and your insurer will tailor your individual policy to the needs of your business. They will also asses the health and safety measures in place and set a maximum claim figure based on this and other factors.

Working Out Your Insurance Premiums

The premiums for this type of business insurance are calculated according to the type of business you have and the level of public traffic that passes through. So for example, a large hotel that has over 100 rooms and has the capacity to house over 100 guests at a time will pay a much higher premium than a bed and breakfast with just two rooms for public use. Similarly, a highstreet retailer will pay more than a home based retailer because of the additional public traffic.

Of course there are other factors that affect the premiums you pay however the level of public activity is by far the main one used.

Simply put, anyone who runs a business that has face to face contact with members of the public should consider buying this type of insurance policy. Even if you only actually see a few customers, or sales reps, or delivery drivers each month it is still worth investing in a policy as you never know what the future holds. Strangely it isn't compulsory to have insurance of this form (although it is a requirement of horse riding schools and other outdoor leisure companies) and so a lot of small business that are just starting out tend to live without it until they start to see sufficient profits. While this may save new businesses a few pounds in the present it can cost them a great deal more should anything happen to a member of the public while on their premises.

Where to go for PL Insurance

Most insurance companies offer some form of insurance to safeguard against public accidents and it is advisable to shop around to find the best deal for your specific company. With regards to shopping around, the internet is always a good place to start and the online comparison sites offer a quick way of finding cheap public liability insurance. Alternatively you can find yourself an insurance broker, either online or through word of mouth, and use their services to help with a policy.

So in summary, any business that deals face to face with members of the public, either on their business premises or at an alternative venue should seriously consider taking out PL insurance. Paying a relatively small premium each month could save you a lawsuit worth millions should the worst happen and someone gets injured because of you or the actions of your business. Although public liability insurance isn't required by law it is definately one of the insurance types worth having, even if you think you'll never need it.