Public & Employers Liability
Public Liability Insurance can help protect you if a third party is injured, or their property is lost or damaged as a result of your business activities.
Quite simply, Public Liability Insurance covers any legal liability your business incurs as part of its business activities. If a third party - such as a customer or business visitor - alleged that they had suffered a financial loss as a result of your business activity, they may take legal action against the company to recover those losses. For example, if a business visitor tripped or fell at your premises and was injured or unable to work, they may sue for damages.
A Public Liability Insurance policy would help you defend that claim and cover the cost of any damages and legal costs.Public Liability Insurance does not cover claims from employees, as they would be covered under an Employers' Liability policy.
Public Liability is typically arranged alongside Products Liability, as part of the same policy. Products Liability covers any claims for compensation that specifically arise out of the use of your products.
There is no definitive answer to how much Public Liability Insurance you need. You simply need to consider the maximum loss that a customer or third party might incur as a result of your business activity, and ensure you have adequate cover.
This will vary by trade - for example a firm of architects working from a small office would be very low risk, compared with a firm of scaffolders working at the large offices of a corporate client. Many construction workers have £10m or even £20m Public Liability cover.
For most businesses within the UK, Employers' Liability Insurance is a legal requirement. Any business that employs anyone other than immediate relatives of the owner, needs to have this cover in place.
Employers' Liability does not cover injury or loss to customers or other stakeholders, as this would typically be covered by Public Liabiility Insurance or Product Liability Insurance. It also wouldn't cover any Employment Tribunal or Constructive Dismissal claims, as these would be covered by Employment Practices Liability Insurance.
The level of cover you need depends largely on the nature of the work people are carrying out. Routine office work is seen as very low risk, whereas manual and construction work, especially if it involves woodworking or exposure to hazardous materials like asbestos, is a significantly higher risk. Many high risk contractors would arrange £20m Employers' Liability cover.