Public Liability Insurance

If your work interacts with the public on a daily basis or is performed in a public area, you’ll need public liability insurance.

It provides legal defence and compensation protection for you and your business, if a third party alleges accidental bodily injury, or damage to their property, caused by you when visiting your business premises, or when you are working in their home, office or business property. (A common exclusion is damage to property being worked upon.)

For example, if a customer slips on a wet floor in your business premises, or someone falls on some stairs because of a ripped carpet, your business could be liable because of its responsibility to provide a safe environment for the public.

We can cover a huge range of professions, from tradesmen to cakemakers and lots in-between.

Almost every business should have some form of public liability insurance. Accidents can and will happen, and being vulnerable to a lawsuit can spell disaster for a growing business.

In fact, many other businesses will not work with you unless you have public liability insurance. Local councils often require businesses under their catchment to have public liability in place before trading.

Public liability insurance is not usually a legal requirement like employer’s liability insurance, but the fact that it is designed to cover claims into the millions shows you how just important it is. There aren’t many businesses that can safely operate without this protection, and you have an ethical duty to be able to provide compensation should someone suffer loss as a result of your business. 

If a customer, visitor or any third-party damages a possession or suffers some kind of loss or injury as a result of your business, you would want to be sure that you can provide compensation.

As a business owner you have a duty of care to make sure members of the public are safe by carrying out risk assessments and health and safety checks.

Regardless, if an incident for which you were liable happens despite all your precautions, you risk both the public's and your business's safety by not being adequately covered.

Each business is different, but for many, public liability insurance is essential as accidents can happen causing injury to members of the public or damage to their property. For smaller businesses who work on smaller projects or with less interaction with the public will often choose lower maximum indemnity limits.

We can tailor indemnity limits to meet your needs with cover ranges including £1m, £2m, and £5m online and higher amounts available which you can talk to our team about.

Public liability insurance is not usually a legal requirement like employer’s liability insurance, but the fact that it is designed to cover claims into the millions shows you how just important it is. There aren’t many businesses that can safely operate without this protection, and you have an ethical duty to be able to provide compensation should someone suffer loss as a result of your business.

Towergate can offer public liability insurance policies with cover from £1 million up to £5 million online. If you require higher levels of cover, please speak to our team.

The amount you need will depend on several aspects:

• Your business activities
• The type of locations and environments you are working in
• The processes involved, particularly if these are of a high-risk nature involving any application of heat-work i.e. blow lamps/torches or welding.
• If your activities are of a hazardous nature or involve the use or supply of hazardous liquids or goods.
• The value of properties you are working at: for example, if using blowtorches onsite in a large office building, how much would the building cost to rebuild in the event of a serious fire? What businesses are trading there and how long will their business be interrupted?

When you are contracting with companies, please check with them to find out if there is a minimum amount of public liability insurance required.

If you’re unsure how much cover you need, tell one of our knowledgeable advisers about your business and they’ll be able to help you get the right cover.

The duty of care that should be provided can vary depending on the person. It's important to understand how and why it can differ, in order to judge the correct level of public liability insurance required. There are three different categories a member of the public could fall into:

Invitees

Invitees are members of the public who interact with your business at your invitation. This may be via advertising, or simply a sign on the door that is also an implied invitation, based on the fact that you have a public premises. Contractors and business partners are also invitees.

Your duty of care is to take all reasonable steps to provide a safe environment for them to interact with your business. Their duty in return is to provide reasonable care for their own safety.

Licensees

Your duty of care here is not as high as with invitees, because licensees are members of the public who are on your premises with permission but without invitation. For example, they can be guests hoping to do business such as salesman.

If you had a business premises with unlocked doors but that is not expressly open to the public, you might expect these types of visitors.

Trespassers

A business has a duty of care to anyone on their premises, even people you are denying entry to. Trespassers are defined as individuals or groups on your property without your permission. The duty of care extends to them with the agreement to not create deliberate danger.

If a member of the public, customer or client takes legal action against your business and you don’t have public liability insurance, you will have to pay your own legal defence fees and any settlement amounts, regardless of, whether you win the case or not.

The possibilities of course are endless but as a rough guide the common claims come under these areas.

Disrepair

Tree roots, snagged carpets, a protruding screw head or broken door. Your duty of care dictates that you maintain the properties and places of work but accidents still can happen.

Slips or trips

Pubs, shops, offices and any private or public area you work could see a hazard created by something spilt by someone or something in your business.

Accidents

Such as items being dropped, falling or breaking whilst in use. These can cause accidents or damage in ways which can’t be predicted. Against all risk precautions insurance for these unavoidable events should always be in place.

No business fits neatly into any one risk category because each one is unique. The job of a specialist insurer is to understand your industry and get to know your business model. That way they can provide or source the cover that best protects your customers.

Public liability insurance is not generally brought in isolation. This is because most businesses require some other cover including employers' liability, product liability or contents cover. We offer a range of business insurance covers so can tailor your policy to suit your business' requirements.

Your public liability insurance cost will depend on a number of factors, including:

• Your trade or profession and the hazards associated with your activities – e.g. work at height, depth, use of heat (blow lamps, welding equipment).
• Whether you are you working on new or existing properties, domestic or commercial.
• The type of locations worked at, any hazardous locations such as ports, airports, tunnels, gas/oil works etc
• Where in the world you work and the activities carried out - e.g UK-only and/or Europe, or worldwide – including or excluding USA/Canada.
• Number of employees, clerical or manual, and if you have any sub-contractors.
• The limit of indemnity you require
• What is included in your public liability insurance quote (standard level or extra covers)
• Your past claims history
• For larger businesses, estimated annual payments to direct employees - clerical/manual, labour-only and/or bona-fide sub-contractors
• The size of your business e.g. turnover (the more work you do, the greater the risk exposure and the higher the premium)
• Your risk management and health and safety record

If you prefer to spread the cost of your annual premium, we offer a quick and easy direct debit scheme. When you choose to pay premiums in instalments, you will be paying under a Premium Finance plan. We will give you full details of the finance provider, and the additional cost of finance, when we provide you with your payment plan quotation. This will include the total payable, the number of monthly instalments and the cost of each, as well as the representative APR.

If you would like to know more about our monthly payment option, please visit our dedicated Direct Debit page.

Public liability insurance is important for many reasons, so we’ve broken them down to explain each one in detail.

• Protecting yourself with public liability insurance means you can focus on your day-to-day business, safe in the knowledge that you’re covered if anything goes wrong.
• Not only will your insurance policy give you peace of mind, but it’ll boost your customers’ confidence in your services too. We all like to know we’re dealing with a reputable person or company with the appropriate insurance.
• Contractors have a duty to of care to operate within stringent quality requirements, taking reasonable care to assess risks and operate under strict safety guidelines. However, accidents can still happen, so it is common for the main contractors and/or principal customers to request evidence that public liability insurance is effective as part of the contract terms, before work commences.
• Typically, the contract will specify that Public Liability insurance will need to be arranged for a specific minimum financial amount, known as the Indemnity Limit.
• The amount of Indemnity limits can vary according to the type of work being undertaken and the location.
• You can choose amounts of £1m, £2m or £5m online. If you require higher levels of cover, speak to our team.
• Where increased cover levels are required, its often financially beneficial to increase the limit for all of your business activities, rather than arrange a special for a one off for a specific contract. The higher cover may assist you in winning new contracts.
• The contract clause may also go on to require that the cover must be underwritten by a reputable insurer, with an acceptable financial credit rating provided by one of the main independent rating agencies i.e. Standard and Poor's (S&P), Moody’s Investor Services, Fitch or AM Best.

All business owners and tradespeople have a duty of care for those they work for, and to the general public at large. If things go wrong and an accident occurs, then there is the chance you may be alleged to have been at fault. This is where Public Liability will be particularly useful to you, as it will initially protect you by paying your legal defence costs. In the event that you are found to be at fault and responsible. Then a Public Liability policy will pay compensation for the damages arising from the accidental third-party bodily injury or accidental damage caused to their property, up to limit of indemnity under your policy.

it is important to understand that Public Liability insurance is not a guarantee of your work. The cover provides for the accidental consequences of defective workmanship, not the rectification of the defective work itself., the latter is your risk and known as a ‘trade risk’.

For example, if you install radiators at strange angles, your customer may reject the work and ask for it to be redone. If this is the case, then the associated time and costs to correct the fitting will be entirely down to you.

However, if due to your poor installation, a pipe fitting accidently leaks, causing damage to third party property then these are the likely costs to be covered by your public liability insurance. Commonly you would be responsible for the first part of any damage claim called a Third Party Property Damage excess. The excess amounts do vary between policies, typically ranging from £50 to £100. It is not uncommon for the more hazardous activities to attract a £250 excess or higher. You must check your policy for the excess and any terms, conditions or exclusions that may apply.

Another example of a trade risk would be where a glazier is fitting a glass window and the glass pane cost £1000. If the glazing contractor accidentally breaks the glass causing injuries to members of the public below, the compensation costs for the injuries will be covered under a public liability policy, but the glazier would not be covered for the replacement cost of the broken window pane itself.

Public liability insurance is not usually a legal requirement like employer’s liability insurance, but there aren’t many businesses that can safely operate without this protection.

Despite precautions, accidents can and will happen, and being vulnerable to a lawsuit can spell disaster for a growing business. As our public liability insurance can cover up to £5 million online, the importance of having this protection is clear.

Given this, it is likely other organisations will not work with you unless you have public liability insurance, and local authorities often require businesses in their area to have the cover in place before trading.

While public liability insurance is therefore not required by law, it is likely to be necessary for your business to operate successfully.

The duty of care that should be provided can vary depending on the person. It's important to understand how and why it can differ, in order to judge the correct level of public liability insurance required. There are three different categories a member of the public could fall into:

Invitees

Invitees are members of the public who interact with your business at your invitation. This may be via advertising, or simply a sign on the door that is also an implied invitation, based on the fact that you have a public premises. Contractors and business partners are also invitees.

Your duty of care is to take all reasonable steps to provide a safe environment for them to interact with your business. Their duty in return is to provide reasonable care for their own safety.

Licensees

Your duty of care here is not as high as with invitees, because licensees are members of the public who are on your premises with permission but without invitation. For example, they can be guests hoping to do business such as salesman.

If you had a business premises with unlocked doors but that is not expressly open to the public, you might expect these types of visitors.

Trespassers

A business has a duty of care to anyone on their premises, even people you are denying entry to. Trespassers are defined as individuals or groups on your property without your permission. The duty of care extends to them with the agreement to not create deliberate danger.

General liability insurance is a broad term widely used in the US, rather than here in the UK. This term tends to describe general claims involving accidental bodily injury or damage to property arising from work performed or from the supply of a faulty or defective product by your firm. These types of insurance cover are commonly known as general, public and products liability insurance.

If you are based in the US, you will need general liability insurance to cover your business. General liability insurance can help cover medical expenses and attorney fees resulting from bodily injuries and property damage for which your company may be legally responsible. It doesn’t cover employee injuries, auto accidents, punitive damages, workmanship, intentional acts or professional mistakes. Exactly what it covers and how it compares to public liability insurance will depend on the insurer and policy you choose.

Businesses based in the UK will need to take out public liability insurance, product liability insurance and employers’ liability insurance instead.

Public liability insurance covers compensation claims made against your business by a third party for injury or damage.

Product liability insurance covers compensation claims for injury or property damage that’s been caused by a product you’ve sold, supplied, manufactured, treated, etc. This is often sold alongside public liability insurance policies.

Employers’ liability insurance covers compensation claims from employees for work-related illness or injury. If you have contracted employees you will need employers' liability insurance, as employers can be fined up to £2,500 a day while they don't have adequate liability cover. You can also be fined £1,000 if you do not display your EL certificate or refuse to make it available to HSE inspectors when requested.

There are several considerations when buying general liability insurance. This will be a combination of your trade and the liability risks associated with it; your location, trade activities, and geographical area that you work and/or supply.

For Manufacturers/Wholesalers/Retailers it will be the type of product you sell and the geographical markets you supply. A business will generally require higher liability indemnity limits where work is carried out in or goods supplied to North America. This is because of higher awards made by North American courts and the increased legal costs that are charged.

We recommend that you seek professional advice form your insurance adviser. Towergate Insurance will be able to assist you.

As with all business-related insurance policies, the following should be considered before purchasing cover:

• Be honest – you have a legal duty to make a ‘fair presentation’ of your business activities and risks. When speaking to an insurance adviser it is important that you discuss your business risks in order to ensure that your coverage is sufficient and suitable.
• Be thorough - read the terms and conditions of your insurance policy to make sure your company's requirements are fully covered. Raise any queries with your Insurance Advisor
• Consider the risks - if an accident caused a member of your staff to get injured you could be liable for many thousands of pounds worth of damages and legal defence costs. It is equally important to consider the risks presented to members of the public arising from business activities and the supply of products.

When starting a new business, you should have public liability insurance in place before you start trading. In fact, it should be a key consideration during the planning stages of your venture. Let’s say for example that you’re planning to open a café and you’re showing a surveyor around the building before the official opening. If the surveyor slips and sustains an injury, you need to be covered.

It may be tempting to cancel your insurance policy as soon as you cease trading, but don’t be too hasty. You’ll need to ensure that any stock or property is covered in the event of accidental damage or fire.

Yes, public liability insurance is tax deductible when calculating taxable profit, as an 'allowable expense' (an expense you can deduct when calculating taxable profit for your tax return). It is included in HMRC’s definition of allowable expenses.

When you buy your public liability insurance, be sure to keep your receipt and your policy documents safe so that you can show your tax calculations if your business is checked by HMRC. Also, if you have an accountant that does your tax return, you will need these documents to show them the cost of your cover so they can calculate it correctly and ensure your public liability insurance is tax deductible.

If a customer, visitor or any third-party damages a possession or suffers some kind of loss or injury as a result of your business, you would want to be sure that you can provide compensation.

As a business owner you have a duty of care to make sure members of the public are safe by carrying out risk assessments and health and safety checks. Regardless, if an incident for which you were liable happens despite all your precautions, you risk both the public's and your business's safety by not being adequately covered.

While public liability insurance provides cover against claims from members of the public for damage to their property or bodily injury caused to them due to your negligence. Employers' liability insurance protects the business from allegations of accidental bodily injury or illness to employers sustained whilst engaged in business activities for you. If you are at fault the policy will initially cover your legal defence costs and then will pay any court awards for injury.

As soon as you become aware of a claim or potential claim being made against you for injury or damage:

• Notify us so that we may alert your insurers.
• Pass all correspondence on to us unanswered.
• Do not ignore or dispose of any letters from any representative of or anyone making a claim against you. The claim is unlikely to go away and the situation will only get worse if not attended to promptly.

We recommend that you:

• Meet your legal obligation to record accidents in your accident book.
• Report all accidents to your insurers.
• Do not accept responsibility or agree to pay compensation even if you think it is obvious that it is your fault.
• Allow your insurers to investigate and advise you of the best course of action to be taken.

If you accept liability before referral to your insurer’s then you could prejudice you and your insurers' ability to defend any claim made against you.

Temporary covers are available, usually under specialist schemes for special events, exhibitions, weddings and concerts. The premiums vary according to the size of the event, the type of activities and the number of person involved.  There’s often a minimum premium attached to temporary policies, so it can be more cost-effective to choose a policy for the year rather than a short period.

It’s possible to take out insurance for special events. For example, the celebrations to mark the Queen’s Platinum Jubilee in 2022 and the King’s coronation in 2023 triggered a huge demand for short-term insurance to cover street parties, local festivals and one-off public events.

Public liability insurance is also required for firework displays. The terms of the policy will depend on the size of the event, numbers in attendance. Whether you’re an individual, a local community association, a school, or a church. Councils will very likely need to see evidence of the minimum level of cover.

If you don’t take out public liability insurance, you won’t be protected if you or your business are sued by a member of the public for accidental damage caused by you or your firm to their property, or accidental bodily injury arising from allegations of negligence from your work activities.

This may be potentially expensive for you, as you would have to fund your own legal costs. Even worse, if you are sued and found to be at fault and guilty, you’ll have to find the money for any compensation payments yourself.

Without public liability cover, your assets, your professional reputation and your business could be at risk.