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Small business public liability insurance

Small business public liability insurance

As a small business you might think you can do without public liability insurance. But it can give you crucial help in covering you against claims, legal fees and other costs if someone is injured or property damaged as a result of your work. Find out what it is and how it works.

Emily Kindness
From the Business team
minute read
posted 28 NOVEMBER 2019

What is public liability insurance for a small business?

Public liability insurance can protect your small business against claims and legal costs from a person (e.g. client, supplier or member of the public) who suffers injury or damage to their property, either at your place of work or while you are working offsite.

Am I legally required to have public liability insurance?

No. Public liability insurance isn’t a legal requirement, but if you deal with the public then it’s good cover to consider adding to your business insurance policy. 

What small businesses need public liability insurance?

It’s worth considering if:

  • You have an office or business premises where members of the public visit
  • Your business organises or hosts events and activities
  • You work from home and customers come to see you there
  • You work anywhere the general public has access to, such as the street or at a customer’s site
  • You want to set up a stall at a market or a craft fair – in these cases, public liability insurance may be a requirement before you’re given a pitch

What should I look for in public business liability insurance?

When choosing public liability insurance for your small business, look for:

  • Level of cover – this is the maximum amount your insurance provider will pay out. Typically, the lowest standard level of cover is £1 million and you may consider that this is sufficient for your business. However, if the type of business you do means you have considerable exposure to the public, you might want to consider a higher level of cover. Some insurance providers will offer up to £10 million.
  • Your contract requirements – check whether any of your clients require a certain level of cover. Local authorities usually ask for a minimum cover level of £5 million before you can tender for work, but some may want £10m minimum. So it is worth checking before you tender for any contracts that your insurance fulfils any requirements.
  • Business activities covered – check exactly what activities are covered by the policy and that there are no exclusions that might affect you.
  • Compensation for loss of work – this could prove invaluable if you have to go to court and miss out on a few days of work.

How much does public liability insurance cost?

Costs vary depending on:

  • the insurance provider
  • the nature of your business
  • your previous claims history

Premiums tend to be higher if your business involves more risk – such as working at height or in high temperatures. The more information you provide upfront, the easier it will be for the insurance provider to be able find a policy that fits your business.

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