Public Liability Insurance: a guide

What is public liability insurance?

Public liability insurance is designed to protect you in the event that a member of the public is killed or injured, or if their property is damaged. Cover includes financial support for legal expenses and compensation payments should a claim be made against you. Many public liability insurance policies offer cover from £1m to £10m.

Why is it important to have public liability insurance?

If your business were deemed liable for an incident such as a customer tripping over a cable in your shop and breaking their ankle, it’s likely you’d have to pay compensation for the distress and inconvenience experienced by the person who was injured, as well as cover legal costs.

It’s even possible you could be pursued by the NHS to cover the cost of medical treatment received by the individual who was hurt.

All in all, you could face a bill for many thousands of pounds – potentially enough to have a significant financial impact on your life.  

Do I need public liability insurance?

Unlike employers’ liability insurance, public liability insurance is not a legal requirement. However, it is considered an essential for nannies and if your job requires you to care for another person.

For example, clients may stipulate that you must have a minimum level of public liability insurance in place before you can work for them. If you wish to undertake public sector contract work, you will almost certainly need public liability cover.

When you work as a nanny or babysitter there are good reasons for you to consider purchasing public liability insurance cover.

What does public liability insurance usually cover?

Public liability insurance usually provides cover for:

– Compensation claims for injuries to a third party or damage to their property, whether an incident takes place on your business premises, a culient’s premises or elsewhere

– Legal expenses

– The cost of repairing damage (for example, to a client’s carpets if you spill something or break something valuable)

– The cost of hospital treatment (including the cost of calling out an ambulance), if the NHS chooses to claim against you

– Any other expenses deemed reasonable.

It’s up to you to decide how much public liability cover you need to put in place, depending on the nature of your business and how much it is worth.  

What is unlikely to be covered under a public liability insurance policy?

First and foremost, it’s important to note that the complete cost of any claim you need to make under public liability cover is unlikely to be met by your insurer. You are likely to have to pay an excess at a level agreed when you first set up your policy – for example, the first £250 or £500 of any claim.

As a general rule of thumb, if you opt for a higher excess the price of your public liability insurance premium may come down – but it’s important to be sure you could genuinely afford to pay the excess in the event of a crisis.

Public liability insurance won’t cover accidents that happen to you, damage to your own property or accidents that affect your employees or their possessions. Incidents like these should be covered under your employers’ liability insurance policy.

Unlike public liability insurance, employers’ liability insurance is a legal requirement in almost all cases where someone works for you, so make sure you know the rules and follow them fully where relevant – otherwise you could face legal action and a hefty fine.