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What Is Public Insurance Liability

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Examples Of Potential Claims

What is Public Liability Insurance? | What is PLI? Towergate

When you interact with the public as part of your job, so many things can go wrong that you may never have even thought about. Here are just a few examples:

  • A shop assistant mops the floor and forgets to put out a wet floor sign. A customer slips and fractures her hip, and subsequently makes a claim against the shop owner.
  • A plumber accidentally damages a pipe in a commercial property, resulting in a massive leak and thousands of euros worth of damage.
  • An electrician installs a new home heating system incorrectly, causing a fire to break out which destroys the familys belongings.

What Level Of Cover Do I Need

This will depend on the nature and size of your business, and the risks associated with that work.

Some public sector bodies and clients in construction will require at least £5m public liability protection.

For most tradespeople and small businesses, somewhere between £1m and £10m will be appropriate.

The greater your exposure to the public, and the perceived risk associated with your trade, the more cover you are likely to require. For example, a construction business is likely to need higher cover than a painter and decorator.

Employers And Workers Compensation

Laws regarding workers compensation, which compensate an employee, vary by country, but the Workersâ Accident Insurance system put into place by Otto von Bismarck in 1881 is often cited as a model for Europe and later the United States.

In many legal jurisdictions workers compensation is compulsory depending upon the business, including the United Kingdom and many states of the United States with the notable exception of Texas as of 2018. Regardless of compulsory requirements, businesses may purchase insurance voluntarily, and in the United States policies typically include Part One for compulsory coverage and Part Two for non-compulsory coverage.

U.S. workers’ compensation insurance generally covers only bodily injury to and death of employees, but it does not always cover other persons who may suffer injury as a direct result of such bodily injury or death. U.S. employers often carry Employers’ Liability coverage to protect themselves from lawsuits from such persons who would still have the right to sue them in the courts, such as an employee’s spouse who claims loss of consortium as a result of the employee’s bodily injury on the job which was allegedly caused by the employer’s negligence.

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Top Professions For Public Liability

There are many professions that might benefit from the protections that Public Liability insurance can provide. These include:

  • Tradesmen and Contractors Such as plumbers, electricians, carpenters and woodworkers, general handymen, and painters. These professions often work on sites where property damage and accidents may be more likely to occur.
  • Consultants Including building consultants, management consultants and advertising consultants, amongst others. Consultants of all types work on-site at their clients place of business or in their own offices. Public Liability can help protect them wherever they may be working.
  • Real Estate Agents As well as Realtors and Mortgage Brokers. Real estate agents frequently hold open homes which can expose them to third-party property damage and injury risks.
  • Fitness Professionals Personal trainers, yoga instructors and others working in the fitness industry. Client injuries due to a trainer or instructors negligence could trigger a Public Liability claim.
  • Beauty Professionals Including hairdressers, nail professionals, salon owners and more. These professionals typically see clients in their business premises, but may also visit them in their own homes. Both could present risks that Public Liability insurance can protect against.

Dont see your profession above? Public Liability insurance may still be important to protecting you and your business.

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Public liability insurance infographic

Public liability insurance is one of the most common types of insurance coverages that small businesses obtain. However, some may confuse public liability insurance with general liability insurance.

For this reason, knowing the difference between the two is crucial, as business owners do not want to buy the wrong type of insurance.

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How Much Public Liability Cover Do I Need

How much public liability insurance you need for your business will depend on the nature of your company. Thats to say, how big your business is, how many people you work with, and what kind of work you do.

For example, if youre a builder working on massive commercial projects, youll probably need more cover in place than someone working on a customers kitchen extension.

Example: Accident In A Shop

If a customer slips on the floor of your store and suffers a back injury, and a warning notice that the floor was wet was not displayed it could lead to a claim against you.

The claim itself could include compensation for the injury and loss of earnings, or any other loss which the person suffered as a result.

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How Does Public Liability Work

Public liability insurance covers claims against your business if a member of the public becomes ill, is injured, or their property is damaged due to your business activities. It can also cover the cost of legal fees and compensation payments as a result of the claim. The public can be a customer, client, supplier, or anyone passing by your place of business.

Whats The Difference Between Public Liability Insurance And Professional Indemnity

Module 4: What is Public Liability Insurance

They may sound similar, but public liability insurance and professional indemnity are two very different products. Public liability insurance covers you when your negligent business day-to-day activities cause injuries or damage to a third party, while professional indemnity covers claims for loss or damage caused by bad advice or mistakes in your service.

Lets use an example. Jenny is a real estate agent whos expecting a potential client for a meeting. The client arrives at Jennys office but trips over the uneven floorboard that Jenny had meant to fix for ages. The client suffered an injury and sues Jennys practice. Her public liability insurance steps in to handle the claim and its costs.

In another example, Colin is an accountant who gave bad financial advice to a client who then suffers monetary damages. The client sues Colin to recoup their losses, and Colin enlists his professional indemnity insurance to cover his legal costs.

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Does The Work I Specialise In Make A Difference As To Whether I Need It

If your business provides a skill or service which involves coming into contact with the public, then you should consider public liability insurance irrespective of what kind of business it is.

Even if you do not work with or around members of the public, accidents can still happen. If you are in any doubt, check with your trade body or association as to what is standard within your industry.

My Business Doesn’t Involve Much Interaction With Members Of The Public

Even if your business is office-based, youll no doubt have clients or members of the public visiting you from time to time, or your staff will spend time out and about at events. And if an accident happens, either on your premises, or as a result of your activities elsewhere, you could be held liable, with serious financial repercussions for your business.

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What Risks Does Public Liability Insurance Cover

Accidents happen. Whether its a slip, trip, fall or someone injuring themselves using your equipment it could lead to a lawsuit. There are many no win, no fee services these days, which means you can still face a liability or compensation claim even if it wasnt your fault. Public liability protects you should a claim be made. Find out more about what liability insurance covers.

What Is Public Liability Insurance And How Does It Work

How much does Public Liability Insurance cost?

The purpose of public liability insurance is to protect companies against claims filed by the general public. Because its liability coverage, itll pay for the insured business legal defense, settlements, court expenses, and damages if someone claims they were harmed on the premises or their property was damaged by the firm.

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About Compare The Market

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To Settle Reasonable Claims

In some jurisdictions, there is a third duty, the duty to settle a reasonably clear claim against the insured. This duty is generally triggered only if a reasonable opportunity to settle actually arises, either because the plaintiff makes a settlement offer, or the insurer is aware of information to the effect that the plaintiff would accept a settlement offer. The insurer is neither required to initiate an offer to a plaintiff likely to refuse it, nor required to accept an outrageous offer from a plaintiff who filed a frivolous lawsuit and cannot prevail against the insured under any theory.

While the insurer may be indifferent in this scenario as to whether it pays out its policy limits before or after trial, the insured is most certainly not. If the first outcome above were to occur, the insured may be held liable to the plaintiff for a sum far in excess of both the pretrial settlement offer and the policy limits. Then after the insurer pays out its policy limits, the plaintiff may attempt to recover the remaining balance of the judgment by enforcing writs of attachment or execution against the insured’s valuable assets.

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Can You Switch From Public Liability Insurance To General Liability Insurance Later

Short answer, yes. Business owners who are just starting out can buy public liability insurance and switch to general liability insurance when they can afford it. If you are start-up or on a tight budget, a policy is better than no policy.

For this reason, you should consider obtaining public liability insurance and then when your business become more stable and you can afford a more comprehensive coverage, you can switch to general liability insurance.

If you are considering buying public liability insurance for now, it is important you learn more about it.

Factors that Influence the Cost of Public Liability Insurance

The factors that influence the cost of public liability insurance include the size of your business, deductible amount, and the risks related with your industry or business. The biggest factor that influences the cost of public liability insurance is the type of industry your business operates in.

For instance, your business falls into the construction industry. Businesses operating in the construction industry may have to pay higher premiums than business not operating in the same industry as theirs. This is due to the use of heavy machinery and that they work in public locations. Business owners in the retail industry may find themselves in the same boat as business owners operating in the construction industry.

Retail business may have to pay higher premiums due to foot traffic, which increases the risk of injuries such as slips and falls.

When Do You Need Public Liability Coverage

Insurance Explained: What is Public Liability?

Any business that interacts with clients, customers, and other members of the public should consider public liability insurance. If a client suffers a slip-and-fall injury at your workplace, or if you or your employee damages a customers property, it could lead to expensive medical or repair costs, or even a lawsuit. Public liability insurance can help reduce the financial impact on your business.

Public liability coverage is especially important for businesses that regularly deal with the public, whether its on-site at your business, a clients business, or at someones home. Even if you conduct business online, you’d still benefit from this coverage since you interact with people when receiving deliveries or picking up supplies.

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Get A Quote Ongeneral Liability Insurance

No matter how safely you conduct your business, accidents can and do happen. If your business interacts with members of the publicfor example, if you run a restaurant or plumbing businessyou face a number of risks if a customer or client is injured or if, in the course of your work, you damage someone elses property. Even minor damage or injury could lead to costly lawsuits that could put your business in jeopardy. Public Liability Insurance can help protect you financially from lawsuits of this nature.

Management And Employment Practices Liability

Workers’ compensation also does not cover intangible torts that merely cause emotional distress, or torts arising from management negligence and liability to shareholders. General management liability coverage may include directors and officers liability insurance, employment practices liability insurance, fiduciary liability insurance, and “special crime” insurance , either individually or as part of a cohesive package.

Employment practices liability arose in the 1980s, after U.S. employees began to obtain jury verdicts against their employers due to workplace actions such as wrongful dismissal.Insurance Services Office , a vendor of standard form contract insurance policies, revised the Commercial General Liability insurance policy form to exclude coverage for torts related to the employer-employee relationship like racial or gender discrimination in the workplace, as well as liability for negligent supervision of midlevel managers who committed such torts. Thereafter, specific policy forms were created to cover this specific risk.

In the United States, general liability insurance coverage most often appears in the Commercial General Liability policies obtained by businesses, and in homeowners’ insurance policies obtained by individual homeowners.

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Protect Your Business With Iauditor

iAuditor by SafetyCulture is a powerful digital platform used by businesses in evaluating their conformance to best practices and industry standards. Using this tool can also help prevent negative occurrences that may cause a disturbance to operations like claims and lawsuits. Proactively identify potential issues and address them using iAuditor, and accomplish the following:

  • Conduct regular inspections and audits to ensure your business compliance with internal policies and industry regulation.

What Is Not Covered

Ultimate Guide to Public Liability Insurance

Public liability insurance is not the same as professional indemnity insurance or employers liability insurance. That means it doesnot cover you against claims for loss or damage by your employees, nor costs that arise if you have made a mistake or are negligent with work for a client that causes them loss.

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How To Protect Your Business Against Claims

Companies put counter measures in place to avoid scenarios that could potentially hinder operations and tarnish their reputation. This may include regular assessment of the policies in the workplace, consistent communications with employees or stakeholders, and promoting transparency from all parties involved. Whatever it is, its important to do everything to limit your risk exposure to claims and lawsuits. Below are some of the best practices that may help in accomplishing this:

Compensation Costs And Expenses

If you have to attend court or pay legal fees

Picture this…

Whats included

  • Youll get accidental damage cover for employees and visitors including vehicles and belongings
  • InjuryWell provide injury cover for working partners if your business is a partnership
  • Legal expensesWell cover legal defence fees including any compensation you owe, and if you need to attend court, we’ll pay up to £500 per day
  • Flexible cover optionsChoose from £1m, £2m and £5m cover to suit your contract or trade

For specific trades, youll also get:

  • Hairdressers Liability Well cover you if your client has suffered hair or scalp damage due to a treatment
  • Products LiabilityCover if a product you make or supply causes accidental injury to someone or damages their property

What isnt included

Like all insurance policies, there are some things we cant cover including:

  • Injury cover for employees We cant cover your employees for injuries for that, youll need Employers Liability Insurance
  • Repair or damage costsWe can’t pay repair or damage costs to a product you supplied or work you completed, including the cost of removing or replacing it
  • Payment of fines and penaltiesWe cant pay for fines and penalties
  • Environmental issuesWe can’t cover you for any damage which occurs from pollution or contamination, or any asbestos-related claims

For more information about our covers and exclusions please refer to the summary of cover documents.

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Other Considerations When You Purchase Public Liability Insurance

As with most types of insurance, if you claim on your public liability insurance policy youll need to pay an excess.

You can select your excess when you compare quotes. The higher your excess, the lower your premiums might be. But you do need to be able to pay the excess you’ve chosen if you do need to make a claim.

You also need to know that your public liability insurance will only pay out if youre found to be legally responsible for paying compensation and claim costs.

How much public liability cover will I need?

It depends on the risks involved with your business. If its high risk, or youre involved with government contracts, you might want to look towards the higher-end around £10 million.

Minimum cover levels start at around £2 million, which is more suitable for smaller businesses with less contact with the public.

What Doesnt It Cover

What is Public Liability Insurance? UK Liability Insurance Explained.

All public liability insurance policies will have a range of exclusions. Some of these are common to all policies, whilst others are unique to specific policies.

Generally speaking, a public liability insurance policy will not cover the following events:

  • Any unlawful activity
  • Any deliberate act to cause damage or injury
  • Personal injury to you or your employees
  • Property damage suffered by you or your employees

There are also exclusions on some policies which are relevant to certain occupations and business types. These can include working on marine vessels over a certain size, working on high-risk locations such as airports and mines or working on construction projects over a certain size.

Most of the mainstream public liability providers will not cover these situations, however there are many specialist insurance providers who will provide cover through specially designed policies.

If you have any doubts about what your policy does or doesnt cover, especially if you do work which is outside of the ordinary, then you should speak with your insurance broker or adviser.

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