5 reasons why small businesses and freelancers should consider having public liability insurance

Reviewed for 2018

The correct business insurance could help ensure the health and security of your business. Here, we give you five reasons why you should consider having public liability insurance.

1. Increase your credibility with your customers and potential customers

Having public liability insurance is often a part of the requirements clients will have when they are looking for suppliers, whether in the building trade, consultancy, or entertainment. Without it you could lose valuable work and your business will lose money.

Having comprehensive insurance also reassures potential customers that your business is reputable and gives them one less thing to worry about in the hiring process.

2. Avoid financial ruin

Public liability claims can be hugely expensive to cover. If a business had to pay the costs involved with an accident which resulted in a claim for compensation, it could possibly be liable to pay thousands or even hundreds of thousands of pounds. For a small business, finding this sort of money would most likely be impossible, and therefore closing the business may be the only option.

Public liability insurance could cover the cost of the compensation payment, along with any related legal fees.

3. Protect your clients from harm and their property from damage

Most businesses have contact with the general public in their daily activities. Whether this is simply through working in a clients’ home as a plumber or running an office where visitors come and go, your business has a duty to protect these people and their property as far as possible.

Part of this duty is having the appropriate insurance to cover any accidents that happen to them through the fault of you or your business. When dealing with you, they should feel secure in the knowledge that they can be appropriately compensated should they be seriously injured or their property damaged. That being said, this is more for your peace of mind than theirs, as no-one really expects the worst to happen to them or thinks about the insurance until they suddenly need to!

4. Accidents and mistakes are just waiting to happen

Don’t assume that there won’t be accidents or mistakes just because you’ve followed all the appropriate health and safety measures. True, it is possible to run a business for many years without it impacting badly on someone else. But is this complacency worth the risk to your livelihood?

Many people don’t think about taking out insurance until they actually need it. In business you can’t afford to take such a risk.

5. Don’t believe us? Read these recent cases …

A contractor drives his cherry picking vehicle into a fellow contractor

After driving his cherry picking vehicle from one site to another, the man who was guiding him through the dark street inadvertently found himself trapped when the vehicle was being parked and it ran over his leg, breaking it in two places.

As a contractor, the driver was required to have his own public liability insurance, and as such the injured party was able to claim damages covering: PSLA (pain, suffering and loss of amenity) of £15,000; Loss of earnings to £8,000; Care to trial of £1,500; Medical expenses of £7,000; Claimant costs of £8,500 and his own costs of £7,000.

A joiner punctures a water pipe and causes extensive damage to a development

A joiner was contracted to install all the joinery in 26 of the flats in a housing development. When the cold water system was tested the piping was found to have been punctured, which caused extensive water damage to some of the flats.

Although not completely aware that he had caused the damage himself, he found himself liable for the damage and had to claim on his insurance for covering the cost of the repair work and his own related costs, amounting to £35,000.

Repairs to shopping centre sprinkler system result in claims from several parties

Two employees from a company contracted to refurbish the sprinkler system at a large shopping centre neglected to cap off the end of part of some pipework, which resulted in a flood once the water was switched back on. Water damage was caused in the centre premises to the stock of several shops.

The sprinkler maintenance company had insurance to a limit of £5 million, which more than covered them for the resulting claims of around £25,000.

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