What is Public Liability Insurance?
In these increasingly litigious times, even small businesses
have to take extra care to ensure that they and their business as a
whole are protected. Public Liability Insurance and Professional
Liability Insurance are two of the most common forms of
business-centric cover. However, knowing the difference between
these two can be confusing, as can knowing whether your business
really needs either of them. While both of these covers protect
your business against legal action and compensation in the event of
a claim, they are designed to offer different forms of protection
for your business activities.
This quick guide will explain the difference between the two
insurance options so you can find exactly the right cover for your
business.
What is Public Liability Insurance?
At its simplest, Public Liability Insurance protects you should
you, in the course of carrying out your work, cause injury to a
member of the public or damage their property. For example, if a
member of the public trips over some of your equipment while you’re
working, or if you knock over an item of value while working in a
customer’s home, then Public Liability Insurance will cover the
legal fees should the member of public wish to make a claim against
you. It will also cover you for any compensation should you need to
pay out.
Do I need Public Liability Insurance?
While not a legal requirement, having Public Liability Insurance
is an important consideration for any business that comes into
contact with members of the public or other businesses. And without
it you could find your business at serious risk of being sued for
large amounts of money. Plus, you may also find that you won’t be
awarded certain business contracts unless you can show that you
have adequate Public Liability Insurance in place. So having it
could not only give you the peace of mind to know that if the worse
was to happen you are covered – but it could also open your
business up to new opportunities.
What level of cover will I need?
The level of cover provided by Public Liability Insurance ranges
from £1million up to £20million and your insurance premiums will
vary depending on the level of cover you take out and the nature of
your business. To help bring your premiums down, you may want to
consider taking out Small Business
insurance – a insurance package that includes Employer’s
Liability, Public Liability and other business essentials, such as
cover for your tools, etc. And remember that some specialist
insurance companies will offer discounts if you are a member of a
professional body. So shop around and find the best deal for
you.
What is Professional Liability Insurance?
Professional Liability insurance, also called Professional
Indemnity Insurance, covers any advice you give to a client in your
professional capacity and protects you should a client believe you
have failed to produce work to a professional standard. For
example, if you are an architect who has designed a building and in
the course of the development it is found that the plans cannot be
carried out and the work has to start again, or if you are an
accountant, who gives your client financial advice which leads to
them making a loss, then Professional Liability will protect you
against professional negligence claims.
Do I need Professional Liability Insurance?
Professional Liability Insurance is not relevant to all
businesses. However, if you are in the business of selling your
skills or knowledge then it may be prudent to take out Professional
Liability cover. Many professions are required to have Professional
Liability as part of their professional authorisation, including
solicitors, accountants, architects, mortgage intermediaries,
insurance brokers and financial advisers. Many consultants,
advertising and PR agencies and designers also choose to have this
type of insurance as it’s often a condition of their contract. In
addition, if you write articles for trade journals or magazines,
then you may want to consider taking out Professional Liability
Insurance to protect you should anyone want to sue you for libel or
slander.
What level of cover do I need?
Professional Liability Insurance can be taken out on an ad hoc
basis to cover you for the length of a particular contract or it
can be provided on a year-by-year basis. The features of each
Professional Liability Insurance scheme will vary depending on your
profession and what professional body you may or may not be a
member of. So you may need to go to an insurer who specialises in
Professional Liability so you can that
you can tailor your policy to your precise needs.
Only you can decide whether Public Liability or Professional
Liability is essential for your business. But if you are unsure,
why not speak to a specialist insurance provider, such as Towergate Insurance. They will be able to help
advise you on the merits of each type of cover. And if you’re
asking yourself whether you can afford it, the real question might
be – can you afford not to have it?
