If you're starting a new business or self-employed, your primary focus is on getting the business profitable. As many fledgling business fail within the first year, overcoming the initial growing pains is a key part of future success. However, it would be a mistake to completely neglect having important safety measures in place that protect your business from litigation.
Most business owners, after all, can accept
losing their business due to things they can control. A lawsuit, on the
other hand, is often something no amount of preparation can prevent, and
requires a strong liability insurance policy to defend against.
What is Public Liability Insurance?
Public liability insurance protects your business against a claim made
by a third party, whether it is a client or a member of the public.
Claims can be made for a variety of reasons, but typically they arise
from injury or property damage resulting from company negligence. Some
examples of common claims include:
• Medical Injuries - If a person were to slip and fall on a wet spot and injure themselves, they are entitled to sue for hospital bills, ambulance rides, or claims made by the NHS.
• Damage to property - This could include a member of the public's personal property, such as a tablet computer or phone that was damaged via a fall, or something much more expensive like damage to a server or an electrical outage. For instance, if an electrician caused an outage for a corporate building, the inability to do business can result in losses in the millions of pounds.
In addition to cover for the above, public liability insurance also provides compensation for the cost of legal representation. In most cases, the insurance company will handle fighting the claim on your behalf, seeing as it is in their interest as well to have the amount of the entitlements decreased.
How Much Cover Does it Provide?
Most public liability insurance is offered at a minimum of £5 or £10
million. In some case, policies can extend to £15 or £20 million
depending on the policy. Given the high cost of litigation, the amount
is designed to provide peace of mind to both you and your customers.
What Doesn't Public Liability Insurance Cover?
One common misconception pertaining to public liability cover is
protection from lawsuits brought forth by employees. Only an Employers'
Liability Cover will safeguard your business from such claims, whereas
public liability applies to individuals outside of your employ. Given
many business have both employees and deal with members of the public,
many insurers offer packages that bundle the two insurance plans
Another thing to keep in mind are exclusions. Many cheaper policies are such because they do not cover areas that are of high risk. It is important to read over the small print and talk to an agent about whether you are covered for certain scenarios. Conversely, you may also be able to lower your rate if you feel that some areas that are covered don't apply. As your business is unique, having a flexible cover will ensure you aren't paying for things you don't need.
How Do I Lower the Cost of Public Liability Insurance?
For the most part, the amount of your premium will depend entirely on the level of risk your business incurs. Quotes are generally given based on historical data with regard not only to your operation, but similar business types. However, many insurance companies will offer no claims bonuses for businesses with a good safety record. You can also raise the amount of your excess decrease the insurance company's liability. Nevertheless, you should be sure your business can pay the excess amount, or else the cover will be of little use.