Owning your own business has its responsibilities as well as its rewards. One of these is to ensure that the public doesn't suffer from your activities. In an imperfect world, however, things do go wrong, so it makes sense to protect your interests from expensive legal claims. In an age of 'no win, no fee” lawyers it has never been easy to launch a legal claim against a business, no matter how spurious. Therefore, you need protection or such a claim could seriously damage your bottom line. This type of financial protection is called public liability insurance.
Depending on the type of business you are operating, public liability insurance can be compulsory. It can often be included in other insurance packages. Properly drawn up Public Liability Insurance covers you for your legal responsibility for:
- Injury, caused by the operations of your business
- Illness or disease to any member of the public
- Loss and damage to a member of the public's property – pollution claims etc.
You need to decide how much public liability may require. This is not always easy as it is hard to predict how much a claim against you might cost. However, while you should certainly explore the market and find out what the best deals are, don't be tempted to scrimp on cover. An insurance policy cost just a few pounds less but which provides far less cover is probably not the worth the risk. Also, be aware that some clients, particularly public sector, require higher levels of cover (£2m as a minimum) so match the level of cover to your business needs.
Finding providers is no great problem as there are literally hundreds. Naturally you should look to use a company that has experience in your particular line of business and who will appreciate the challenges and risk your business faces.
However the fact that you have public liability insurance does not relieve you from the responsibility of taking due care in your business operations. You are still obliged to live up to your legal responsibilities.
The key challenge of this type of insurance is gauging how much you think you will need. Obviously you will have to judge on the basis of what you think your risk is, but do not underestimate. One million pounds might seem like a lot of cover, but if you find yourself facing a series of claims from a group of people then the legal fees alone could cost you a fortune.