Public Liability Insurance Explained

Monday, February 10th, 2014

Getting the right Public Liability Insurance cover for your business activities is crucial. This will not only protect the innocent party in a claim but it will protect you and your business.

Insurers are not just there to deal with third party claims, they also there to protect their policy holder against false and exaggerated claims.  Defending these claims can be very costly in time and professional fees – even as the innocent party.  Without the right insurance cover these costs could send a small company out of business. Making sure your Public Liability Insurance includes Legal Expenses is just one way of reducing your exposure.

Another important option to consider is including tools and business equipment.  This does not come as standard under a Public Liability Insurance policy and is often offered as an optional extra. In some circumstances this cover may not suit the business.  For instance there will be an excess to pay on all claims which usually ranges from £100 – £500 (dependant on the insurer and claim circumstances).  For some small businesses they may only use hand tools of fairly low value which can be replaced for under the excess amount on the policy.  If this is the case then there would be no need to include tools cover.

Other business may have a large collection of tools and plant and therefore should make sure they are adequately insured.  If not could you afford to go out and replace all your tools today if they were stolen?

Hiring plant and machinery is also a regular occurrence for many businesses.  Hire companies can usually offer an insurance policy at point of sale which includes cover for their items should they be stolen or damaged in your care.  However this will then add to the cost of hiring the said item and increasing your costs therefore reducing your profits.

An option to consider and offered by many insurers is to include ‘hired in plant’ cover to your insurance.  The cost for this added insurance cover is usually based on your annual hire costs and the single article limit (cost of replacing the item of plant).  The benefits include saving paying out on insurance on each hire, saving the usually higher excess amount payable to the hire companies insurer, and convenience as the hire companies accept the item is adequately insured.

Including temporary manual workers is also an option to consider.  Many manual trades employ casual labour on a job to job basis and as the employer the onus is on you to ensure you hold adequate insurance.  This includes cover for employee against injury to themselves and against them causing damage or injury to third party property or persons.  Insurers usually have a limit on how many days are classed as temporary but if you fall within these limits having temporary employee cover will save you money on your premium as you are not paying the full cost of adding a permanent employee.