What does public liability insurance cover?
If your work brings you into contact with the public, you will almost certainly need public liability insurance, especially if you are a tradesperson, in construction, or a shopkeeper or other small business.
In this video, part of our Public Liability FAQ series, we answer the question ‘What does public liability insurance cover?’.
Public liability insurance helps businesses meet the costs of a claim for damages or injury that occur to a third party, during the course of regular work.
What kinds of incidents are covered?
Public liability insurance covers claims brought by people that interact with your business, such as customers, clients, and members of the public.
For example, if you are a builder and accidently drop heavy building materials on to a nearby car, the vehicle’s owner could claim to cover the cost of damages. Your insurance would cover the resultant costs.
Similarly, if the car you damaged was involved in a crash, and the cause of the accident was directly linked to the damage you caused, you could claim on your policy to cover the cost of compensation filed for the driver’s injuries.
Other examples could include:
- A plumber who accidently damages a pipe, causing a leak which results in material damage to a building.
- An electrician who wires a building incorrectly, resulting in a fire that causes damage or injury.
Public liability insurance does not cover claims brought against you by your employees.
What expenses and costs will public liability insurance cover?
Claims for personal injury and / or death, damages and legal fees are typically covered by a policy.
What is a ‘personal injury’ claim?
These range from anything minor to life-changing conditions, illness, disease, or death, provided they were caused by you or your business.
More specifically, the injured party may claim for:
- general damages for pain and suffering
- loss of earnings due to the injury
- future loss of earnings (if the injuries reduce the person’s ability to work)
- medical bills, future medical bills, travel costs, necessary medical equipment costs, and other out-of-pocket expenses
- legal fees and other reasonable expenses that are the result of making the claim.
What ‘damages’ will public liability insurance cover?
Most insurance policies cover the cost of any damage to property. This could range from a torn suit or ruined shoes to a broken computer, crumbling building, or dented vehicle.
Does public liability insurance cover legal fees?
Your policy will usually cover the cost of legal fees that are associated with defending a claim brought against you.
The precise details of what your insurance will cover depends on the individual terms of your policy.
What level of cover will public liability insurance provide?
How much cover you have will depend on your policy. You will normally be offered a choice of £1 million, £2 million, £5 million or £10 million.
Insurance within this range is sufficient for most small businesses. However, you should discuss this with your insurer.
Who will be covered by public liability insurance?
You and your employees will be covered for anything they do, or fail to do, that results in injury or damage to a third party.
It will not cover claims made by your employee against you for damage or personal injury.
Is having public liability insurance part of my compliance?
For most businesses, having public liability insurance is not necessarily a legal requirement. However, it is good practice.
You should always ensure you are complying with health and safety regulations, regardless of whether you have an insurance policy in place. If you do not, it could affect your cover.