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What is public liability insurance?

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Many business owners don't take the time to understand public liability insurance, and could face paying exorbitant fees for damages if their policy proves to be insufficient for their needs.

A woman holding a loaf of bread in a small deli

Public liability insurance is the most common type of insurance taken out by small businesses, but with a range of cover options available, it's just as well-suited to larger firms.

Public liability insurance may be a confusing concept at first, but by researching precisely what liability insurance covers, you can find out just how much cover you should take out to safeguard your business in the public sphere.

Is it compulsory?

While public liability insurance is not a legal requirement for some businesses, it should be considered essential if members of the public will be interacting with your company in any way - from customers receiving deliveries to clients visiting your office or work premises. This means that even home-based businesses should consider public liability insurance if their home office is also used as a meeting place.

So what does public liability insurance cover, exactly?

You'll find that your insurance policy covers a vast range of situations, but generally speaking, a public liability insurance policy covers your business if someone is injured in some way by your business, or if you damage third party property when carrying out work. Bear in mind that even a minor scratch to personal property could lead to hefty fines, especially as you could be required to pay legal fees if the case goes to court, and these too will be covered by your policy.

When taking out public liability insurance, you need to tell your insurer what type of business you operate. This is not just for the sake of records, but will help you come to an agreement over the type of policy best suited to you - whether your insurer judges cover up to £1 million to be sufficient for your needs or if a larger policy of around £5 million would be more appropriate in the circumstances. If you work in the public sector, for example, you will often be required to take out a minimum of £5 million.

Don't assume you will be safe without public liability insurance just because you run a small business, or because you don't make deliveries. Something as simple as a coffee spill over a client's computer, or a loose nail causing a customer to trip while visiting your office, could cost you thousands if you're uninsured.

The content contained in this article is for information purposes only and should not be used to make any financial decisions.

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Compare public liability insurance

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Public liability insurance

Cover for you, your business and the public.

Get a quote