Public liability insurance: Business essential or nanny state gone mad?

Many business owners make the mistake of not properly understanding public liability insurance before launching their small business. This leaves them at risk of paying exorbitant fees for damages in future.

Public liability insurance is suitable for both small businesses and bigger corporations. The concept appears confusing on the surface but with proper research into available policies, it is easier to see how the range of options available can protect your business from disaster. It must not be confused with employers’ liability insurance.

Is Public Liability Insurance compulsory?

Public liability insurance is not compulsory by law. However, is essential if your business will be interacting with the general public in its day to day operations. Do customers visit your office or work premises? Do you send deliveries to your customers? Are you operating a home based business with meetings holding in your home? Public liability insurance is essential for your business.

What does public liability insurance cover?

Public liability insurance covers a wide range of scenarios. Generally however, you can expect cover if anyone is injured by your business or when third party property is damaged during the course of your business. The damage doesn’t always have to be massive. Even a minor scratch could set your small business back by tens of thousands of pounds as long as the affected party agrees it is enough to seek redress in court. Public liability insurance will not only provide you cover for against the fines but will also take care of your legal fees.

To get an effective public liability insurance policy, you need to provide a comprehensive description of your business processes to the insurer. This goes beyond documentation purposes as it will help the company determine the policy best suited to your business. The two main policy types, such as this one offer cover for up to £1 million and up to £5 million respectively. Businesses in the public sector are most likely going to be offered the latter by insurers.

It is important to avoid assumption that there is no need for public liability insurance because you run a small business and it is not a legal requirement. Simple scenarios such as liquid spill over a visitor’s computer or a poorly lit doorway leading to a visitor’s fall and injury could leave you in danger of paying thousands in fines without public liability insurance.