Liability Insurance & Public Liability Cover Explained
Public liability insurance for UK businesses is essential. It covers professional interactions with your customers, clients and members of the public. It will protect your business against any claim made for compensation for injury or damage to property by a third party that occurred as a result of your business operations. The third party could be a customer, visitor, trespasser, sub-contractor or other member of the public. The main damages covered are:
- Compensatory and injury damages
- Property damages
- Ambulance fees and medical bills claimed by the National Health Service (NHS)
The insurance will protect the business owner and the employees if they cause any injury to the public. The insurance carrier will also defend the insured to avoid the case going to trial if possible. If a customer, or member of the public slips, trips or falls on your premises, they could make a claim against your business. If the claim goes to court, you could also be liable for their legal costs. It is common coverage for retail businesses where there is a lot of pedestrian traffic such as theatres, sporting venues, resorts, markets, hotels and businesses that serve alcohol.
It also covers employees who visit other premises. For example, if a plumber destroys an expensive carpet because he accidently breaks a pipe, the insurance will pay for the damage to the carpet and any medical bills from the NHS for treatment if the client slipped on the wet carpet and became injured. The public liability policy could also cover any psychological trauma that is experienced by the client due to the accident.
Most insurance companies offer plans that can be customised for different types of businesses. Negligence is the most common reason cited in liability claims. There are several reasons for negligence from improper training of an employee to a wet spot on the floor that has no warning sign. Injury is not the only result of negligence. Hazardous working conditions and excess of pollutants that cause illness and disease are also the responsibility of the company. Negligence includes:
- Delivery of defective products
- Defective services
- Lack of proper warning about products
- Lack of proper instructions about products
- Unintended manufacturing defects
The cost of damages can be very high in some cases. For example, if an electrician makes a mistake when wiring a building, he could be liable for the cost of repairing the wiring in the entire building. The risks are different for different types of businesses. Another type of damage could be monetary damage caused by a mistake made by the business.
There are exclusions imposed by insurance companies for certain kinds of dangerous professions and other reasons. These include:
- Asbestos removal
- Use of scaffolding
- Defective workmanship
- Deliberate acts
- Damage to property owned by the insured
There are other types of liability insurance for businesses that cover other aspects of the business. The main kinds are:
- Product liability
- Professional liability
- Employer's liability
- Personal liability
- General liability
Public liability insurance policies will protect a business against the unintended errors and defects that can happen to any business during normal operating procedures. Self-employed individuals should also consider public liability insurance if their services or products could unintentionally cause any harm to their customers. A lawsuit can cost millions and completely wipe out a small business if it doesn't have insurance.