Whether you own a business or work as an independent contractor, it is important to protect your company and your personal finances with public liability insurance. This will protect you in the event you cause an injury to a third party or damage their property. While such an occurrence may appear to be unlikely, given that the cost of legal, medical, and emotional compensation can escalate into the millions, all it takes is a a single incident for you to become insolvent.

What Public Liability Insurance Covers

There is a reason that public liability is standard for most businesses. Anything from a spilled drink, a slip on the floor, or negligent advice can result in a lawsuit against your business. Public Liability insurance is designed to safeguard your business in the event that such an accident occurs. It will defray the cost of whatever property damage the claimant endured, as well as any medical fees and legal representation. Public liability insurance, however, does not cover the following:

Employee claims

Employer’s Liability Insurance is required for injuries and property damage suffered by your employees

Deliberate Negligence

If a safety issue was deliberately ignored or dismissed in order to save on costs, the insurance company will likely not cover you if an accident took place.

Examples of Public Liability Claims

In order to illustrate how public liability insurance works, here are a few classic scenarios that result in claims:

  • A self-employed PC support and repair technician visits a client site to mend some equipment. He accidentally spills a bottle of water into the client’s main server, causing irreparable damage. Not only does the equipment need to be replaced, but the client can no longer do business until the new server arrives.
  • You own a small store with a restroom. The area has been recently mopped, but the appropriate sign has not been placed to indicate the floor is wet. A customer slips on the tile and falls, injuring himself. He is unable to work as a result, and has a number of medical bills.
  • You run a day-care operation. While in your care, a child injures himself while running around, or swallows something toxic while under your supervision.

As you can see, the need for liability insurance is necessary regardless of the type of business you run. For child care providers and other high risk businesses, public liability insurance is mandated by law. As children are highly capricious, highly vulnerable, and are wont to injure themselves in a variety of ways, the need for a nanny to protect your business is all the more imperative.

How Much Cover Will You Require?

The amount of cover you seek will dictate the cost of your premium. However, choosing an insurance plan with a low level of cover may leave your business vulnerable should an accident occur. In fact, some high risk businesses such as child care have government instituted requirements. Otherwise, most public liability insurance plans tend to start at the £1 million, with increments of £5 million or £10 million for those in need of more protection.

Typically, you can save on the cost of premiums by bundling the insurance with other offerings, such as Employers’ Liability Insurance. You may find the price more favourable than had you purchased the items separately.