Public liability insurance (PLI) is used by different-sized businesses in a range of sectors. It protects you if a customer, or a member of the general public, reports injuries or damage to their property due to the activities of your business. Insurance of this kind is intended to cover entrepreneurs against allegations that lead to legal action.
If an allegation does result in legal proceedings, PLI covers the related costs – such as any damages you are obliged to pay.
The Claims Covered by Public Liability Insurance
A public liability claim could be made for many reasons; however, negligence is often the primary theme. Different providers offer coverage for different types of claims. Nonetheless, the majority of PLI policies cover allegations linked to the following areas:
1. Falls, Slips, and Trips
Mishaps occur and people who visit your business premises could be injured if they fall, slip or trip. For instance, if one of the customers in your shop trips on a bumpy surface, or slips on a recently cleaned floor, they could break their leg. If they file a claim, you might be found culpable and have to pay damages.
2. Property Damage
Most public liability claims concern property damage. This could be damage that you, your staff, or an independent contractor working at your premises cause. For instance, if a builder knocks over a ladder and damages someone’s possessions, or if a staff member spills a cup of tea over a client’s tablet during a consultation, PLI will cover the compensation fees.
3. Sickness
If someone becomes sick after they have visited your premises, they could claim you. This is especially true if you run a cafe or catering firm, however, you do not have to work in the food industry to be found guilty of causing sickness. Claims like this might be made if you provided trade show refreshments, or hosted a catered banquet event, and someone subsequently fell sick.
4. Disrepair
All business owners are duty-bound to maintain their premises in a safe condition for their staff and other visitors. If someone visits your office and suffers an injury due to disrepair, you could be held responsible. Claims of this nature could arise from protruding nails, broken steps, loose floorboards, or equipment that has not been properly serviced.
Bear in mind that PLI only protects you against claims made by the general public. To be insured against claims made by your staff, you require the employer’s liability cover. This is a legal obligation if you employ people. Professional indemnity insurance is what you would need if a client files a claim against you, due to poor advice.
Benefits of Public Liability Insurance
For the relatively low cost of taking out a public liability insurance policy, the benefits are numerous:
1. Improve the Reputation of Your Business
Many customers and clients search for businesses with full insurance, just in case anything goes wrong. Your construction project bid or government contract application might be declined, for example, if your competitors have PLI and you don’t. In addition, potential clients often regard insured businesses as reputable and are more likely to do business with them.
Therefore, you can increase the likelihood that you will attract new clients if you arrange PLI with a suitable amount of indemnity coverage.
2. Safeguard Your Clients
If your business engages with the general public regularly, you are morally and legally obliged to safeguard them as much as possible. A big factor in this is to put people’s minds at rest, however, it is tempting to overlook insurance until something bad happens. Entrepreneurs make this mistake time after time; however, your business should not be exposed to the associated risks. A proper PLI policy allows your clients to receive the damages they require, should you do anything that affects them negatively.
3. Avoid Financial Ruination
Without proper PLI cover, one unforeseen accident could land you with a six-figure bill. Even if the legal expenses were lower in these types of cases, the subsequent medical fees can send many small businesses bankrupt. Most of the time, PLI pays for the cost of lawyers and any resulting medical bills. This allows you to concentrate on core business tasks, rather than drawn-out financial and legal matters.
4. Cover all Your Bases
Most businesses take steps to avoid harming their valued clients, however, issues can still present themselves even if you take the correct health and safety precautions. No accidents might occur in your workplace for a long period; however one is sure to happen at some point. You can ill afford to play Russian roulette with your business by failing to anticipate the dangers inherent in your industry.
Final Thoughts
If you don’t have PLI when someone claims you, it could harm your business financially and damage its reputation irreparably.
For this reason, you should sign up for this coverage straightaway. Doing this will allow you and your staff to work responsibly for the general public with confidence. It is wise to use an insurance broker to find the right insurance policy.
A good broker will offer objective advice about the cover that suits your requirements and budget. This will not cost more than purchasing insurance directly.
Insurance providers pay brokers a commission to sell their products, so your premium should not have any extra fees. Better still, a broker can help you prepare claims and get you a more efficient service from the insurer.
