Public liability insurance
Who needs public liability insurance?
Public liability insurance is primarily aimed at businesses. It protects businesses, its employees and customers against injury and accident. Not all businesses are legally required to take out public liability insurance, but in most cases it makes sense to have some form of public liability insurance in place, especially if your business sees people going in and out on a regular basis.
The insurance will cover you against any lawsuits due to accident or injury. In the UK, so-called high-risk businesses are required to obtain public liability insurance. These include sporting facilities, such as gyms or riding stables, or businesses where many customers may be at risk, such as shopping centres or bars.
As with any kind of insurance, there are many types of public liability insurance packages on offer. Before shopping around, it is important to understand what risks your business may encounter and which of these should be covered by the insurance.
It is not possible or cost-effective to buy insurance coverage for every feasible eventuality. Therefore, it makes more sense to buy a policy that covers only what you need. By assessing your exact needs, you can also better shop for, not only the best coverage, but best premiums as well. If you are in a high-risk business, it may make financial sense to seek out the advice of an insurance broker.
What does public liability insurance cover?
Coverage varies from policy to policy; however, generally public liability insurance covers businesses against accidents in the workplace. For example, if you own a florist and a customer slips, falls and breaks a leg, your public liability insurance would cover the customer’s medical bills and any legal costs associated with the accident.
Of course, the exact amount of coverage and the excess you may have to pay will vary from policy to policy. For example, some high-risk businesses, such as those operating riding stables, will have exclusions in their policies. That is why, in many cases, customers are asked to sign waivers in case of injury.
However, many customers going to gyms and other public areas may want to see proof that a business has public liability insurance. If it does, it should have policies displayed in a public place.
How are premiums calculated?
Every insurance company has their own premium formula, but most will consider similar factors when quoting rates for public liability insurance. Insurers will assess the risk level of your business; is it low, medium or high risk for injury? How many people visit your business on a daily business? Is it a risky business? Historically, how many people have been injured at your place of business? The answers to these questions will directly impact on your insurance premiums.
As with any insurance policy, premiums will also be influenced by excesses and coverage amounts. Generally speaking, high excesses will lead to lower premiums. You should also talk to you insurance company about how you can lower your premiums. This might involve making your public area or activities safer in order to avoid potential injuries.