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01 Jan 2011
Adam Bate

Why public liability insurance is so important


If you run your own business, you should know about public liability insurance and why it's important to have this cover in place.

Unless you're a horse riding business, public liability insurance is not a compulsory component of your expenditure. 

However, this type of cover - often referred to as PL insurance - is an important consideration if you run a business that involves interacting with members of the public.

That's because, if your business is ordered to pay damages for causing injury or property damage, public liability insurance will cover these costs as well as any associated legal or hospital fees. 

As a result, it could mean the difference between your business staying open and closing - especially if you run a small operation.

So whether you run an operation with a large amount of people visiting your premises (such as a hotel or a shopping mall), or if you do small jobs on other people's property (for example, builders, carpenters and other tradesmen), public liability insurance is well worth considering.

How do I arrange public liability insurance?

To make sure you choose the best public liability insurance policy for your firm, first speak to an insurance adviser. 

A professional will be able to explain to you the ins and outs of a policy and the benefits it will offer you and your business. 

If you're not sure where to find a certified insurance broker, check the British Insurance Brokers Association (BIBA) website for details of who's available in your area.

Alternatively, if you'd like to take an individual look at what's available to you, you can compare quotes using an online comparison service. In this instance, it's worth asking your company lawyer to read over your policy before you sign up.

Your application

When calculating your public liability insurance quote, insurers will consider a range of factors. The primary factor may be your level of business activity, which is usually based on your turnover. If you're a tradesmen or your business involves working on a property owned by another person or company, you should ensure that your policy includes third party cover. 

For example, if you're a plumber and you accidentally cause a leak or flooding, PL insurance with third party cover should ensure that any associated damage payments for which you are liable are taken care of.

As with any insurance policy, it's crucial to fill out your application as honestly as possible. If you need to make a claim and your insurance provider discovers that you have falsified information on your application, your policy could be rendered void. 

In some cases, particularly with small businesses, this could mean closure. Overall, public liability insurance will drastically reduce your overall financial risk and, in the event that personal injury or property damage is caused by your company, may be instrumental in safeguarding your business longevity.

The author of this article is a part of a digital blogging team who work with brands like Gladiator Insurance. 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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