This is a question that many business owners ask and the simple answer is just about everything. In the UK, every business must have some form of public liability insurance and the amount of cover is something for the customer to decide. When thinking about commercial insurance, one needs to look at the worst case scenario – which might involve an accident that results in loss of life and tremendous damage to property – and the insurance provider would be able to advise accordingly.
Public Liability Compensation Claims
Let’s take a small construction company as an example, and supposing one of the workers made a mistake and badly damaged the client’s property. The client could and likely would make a claim for compensation against the builder and should he or she be successful, then the builder’s public liability policy would cover both the compensation claim and any legal costs that arise from the claim. An employee working in a customer’s home could spill paint on an expensive carpet, for example, and public liability insurance exists specifically to protect the business against any claim made by a member of the public for personal injury or property damage claims.
This really depends upon the size and scope of the business, but the minimum amount of cover would be at least £1 million and might extend to 20 times that amount. A compensation claim could be very high, especially if a member of the public was seriously injured and requires permanent care for the rest of their life. Life is full of uncertainty and without some form of public liability insurance, your business might have to fold if you cannot meet a compensation award that is related to an injury caused by one of your employees.
As any entrepreneur will confirm, the business owner must do everything they can to minimise the risk to their business and with both public liability and employers liability insurance in place, you can relax, knowing that you are covered for every eventuality. Despite the best care, accidents do happen and with the right insurance cover in place, your business is protected against any claims.
Injury to Employees
If a worker is injured for any reason, then they would not be covered by public liability, rather the business owner would have what is called employers liability insurance, which is specifically to cover for any claims made by employees. For many small businesses, a combined policy that covers both public and employers liability is the preferred solution, with the cover limit to be decided by the employer. The insurance broker would advise regarding this as they have a lot of experience in dealing with accident and personal injury claims and it is their job to ensure that their client is adequately covered for any eventuality.
Therefore, public liability covers the business against any claims made by third parties for personal injury or property damage and such is the need, that you are required by law to have this form of insurance.