Small Business Need Public Liability Cover - Do You Need It?

Any sizeable business will have public liability insurance cover in place, but for many small businesses where every cost has to be considered, how do you know whether it is really necessary or not. The first thing to be clear about is that it is not compulsory to have it (apart from one or two specialist areas of work). There is no law that says every business must have this cover in place, unlike employee liability cover, which anyone who employs staff must have by law.

So it is your decision as a business owner or manager whether there is a business need for public liability insurance. The first step towards making that decision is to understand what exactly it is, so that you are better able to judge how crucial it is for your operation. This type of specialist cover is all about protecting you from claims by third parties for damages to property or for personal injury.

In our ever more litigious society it is all too easy to imagine how the legal fees and compensation claims for any type of injury could quickly become very substantial indeed. This is one of the reasons that liability cover is even more important for a small business than it is for some larger ones. If there was a claim against a self employed person or any small operation, there is every chance that settling such a claim would be impossible and could even spell the end of the business. Whereas a larger company may be more able to cover such costs and carry on trading.

In order to make a decision about your need for such a policy, it can help to think about the type of circumstances where this kind of insurance is needed. Because we are talking about claims by third parties, the situations to consider are times when you or your employees are either on other people’s property to carry out your work, or times when other people are visiting you on your own premises. Any kind of contact with other people and their property is when the risk occurs.

For example, if you were working at height on the outside of a building and you let a tool slip out of your hand. If it landed on someone and injured them, that would be a classic example of when a third party claim would be made against your company. It may not be as serious as that – it could just be dripping paint on someone’s expensive new suit. There is still a cost involved and if you have a few instances over the course of the year your modest insurance premiums can soon be very worthwhile.

As well as personal injury, there are an almost limitless number of ways that you or your staff could cause damage to someone else’s property if you work regularly on other people’s premises. However, you also need to consider your own place of work if you ever have clients or other contractors on your premises. If someone is at your office to see you and they manage to fall, injure themselves, or damage something of theirs, that could also result in a claim. There appears to be no such thing as an accident any more, so anyone tripping up, even outside your premises, may have a claim against you for negligence.