Why do I need Public Liability Insurance?

Public Liability insurance is not a compulsory insurance but is generally required to protect your business against legal claims. For example if you are a small business of self employed sole trader, a Director of a company or an employee, then you could all potentially be at fault to be blamed for injury to a 3rd party, which can be a member of the public or property damage.

If you do not have a Public Liability Insurance policy, the law states that as a business or individual, payment for losses caused will have to be paid by the business or you if a self employed sole trader.  With legal costs and compensation awards amounting to potentially a significant sum of money, you would have to pay this.

Therefore, to protect your business and yourself, Public Liability insurance should be considered as part of your business insurance policy.  If you work from home and customers visit you or you visit customers in their home, if you are a self-employed small business and a claim is brought against you and you are not covered, remember potentially it could be detrimental for you.

Public Liability claim example:

A customer is visiting your premises and she injures herself whilst visiting.

The customer contacts their solicitor to start a claim for compensation against you for injury and loss or earnings.  If you do not have Public Liability Insurance, your defence will begin:

  • You will receive court notification of the claim the customer is making against you.
  • You would need to contact your own solicitor and advise or if you do not have a solicitor find one and obtain an estimate of costs.
  • You will need to provide your solicitor with a documentation of events leading to the claim.
  • Both solicitors will collect evidence and document.
  • You will invoiced direct by your solicitor for costs.
  • If the claim is contested by the injured party a court hearing will take place which you will need to prepare for.
  • You will need to pay for solicitors, barristers and court fees.
  • If you lose, you would then incur further costs for compensation, damages, medical costs and legal fees of both parties.
  • If you win you need would need to recover, as much of your legal costs from the claimant – rarely are legal fees recoverable in full.

If you have Public Liability Insurance, the outcome is far less damaging to you or your business:

  • The injured party begins the claim for compensation.
  • You would pass the claim documents to your insurance provider.
  • You can carry on with your business as usual whilst your insurance provider would deal with claim for compensation.
  • You provide the insurers and their solicitors with all documentation relating to the incident.
  • All of the legal details and costs are handled by your insurance provider.
  • If you lose the case in or out of court then the insurer will pays the compensation, damages and legal costs.
  • If you win the case, and there is no claim then the insurer collects the legal costs from the claimant.

It makes sense to protect your business, yourself and your customers from the almost inevitable hassle of legal disputes.  By having, a solid, tailored Public Liability Insurance policy with The Business Octopus will help and give you peace of mind that you are fully protected.

Our insurance specialists are available Monday to Friday for any questions that you may have relating Public Liability Insurance or any other type of business insurance, so call us today and find out if we can help you and your business.