Running a business

What is public liability insurance and what cover is required?

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    Whether you’re operating as a sole trader or you’re the director of a limited company, having the correct business insurance in place is vital. Insurance cover to consider includes professional indemnity insurance, employers’ liability insurance, and – as we explain in more detail here – public liability insurance.

    Public liability insurance definition

    Simply put, public liability insurance protects you, the business owner, against claims from members of the public. It’s also there to protect the public should any accident or injury be caused by your business (either by you or one of your employees).

    Do I need public liability insurance?

    If you or your employees interact with members of the public on behalf of your business, it’s generally a good idea to have this in place.

    This insurance can protect you in scenarios such as:

    • A member of the public being injured in a shop you own
    • A client being injured while visiting your office
    • People being injured during an event you’ve organised
    • A passing member of the public being injured by tiles falling off your office roof.

    In all these examples, public liability insurance would protect the business if a claim was made.

    What if I work from home?

    Public liability insurance might not seem like a requirement for someone who works from home. However, even if you don’t have regular day-to-day contact with the public, it’s still worth considering getting this cover in place.

    For example, you could find yourself being sued for damages if a client calls in to drop off a package and, in the process, trips over a stray wire in your home. Having public liability insurance ensures you’re protected from this type of claim.

    Will public liability insurance protect my employees?

    If you employ any staff, they won’t be covered by your public liability insurance. Instead, you’ll need to have employers’ liability insurance in place. Read our article on employers’ liability insurance to find out what it covers and what the legal requirements are.

    Am I legally required to have public liability insurance?

    There’s no specific legal requirement to have public liability insurance in place. However, having this insurance cover shows you’re aware of your responsibilities as a business owner, which can be particularly valuable when pitching for new work. You may also find some clients demand you have it before they engage with you.

    Does public liability insurance help with IR35 issues?

    If you work through a personal service company and you’re concerned about the impact of IR35 on your business then having the right business insurance in place can help show that you are genuinely self-employed not a disguised employee and therefore should be outside IR35.

    How much cover do I need?

    The level of cover you require ultimately depends on your type of business, but most public liability insurance policies provide cover for a minimum of £1 million. As with other forms of insurance, you may find your clients require you to have a set level of cover in place. It therefore pays to check your contracts carefully before taking on new clients.

    At Crunch, we offer policies from our trusted partner Kingsbridge, that can include public liability insurance from £1 million right up to £5 million.

    When should I have cover in place?

    Public liability insurance won’t cover you retrospectively, so you should have it in place as soon as you start to interact with members of the public.

    If you’re a freelancer, contractor, or small business owner, Crunch can help you find business insurance tailored to you.

    Insurance from Crunch

    If you have any questions about business insurance, or you think you may not currently have the right cover in place, you can talk to our insurance partner – Kingsbridge. You can contact them by phone or using our online form, all the details are on our small business insurance page.

    Crunch clients, or Crunch Chorus and Crunch Free members can get a 10% discount on quotes from within their Crunch software dashboard.

    More advice on Small Business Insurance

    Our Small Business Insurance guide will help you learn what type of insurance your business needs to operate from a legal perspective, as well as additional insurances which may be right for your business.

    Thinking about Life Cover, too?

    We’ve partnered with Seico to offer advice on all types of Life Cover. You can call them on 0330 057 4689 and they’ll be able to offer individual advice on the best type of cover for you.

    Find out more about our Life Cover