The price of UK liability insurance covers depends on the nature of your business, as well as the risk factors that are likely to occur in your line of work. Multiple different policies are available from insurance providers, and each of them will vary by the type of business you own, and whether or not you have made any claims in recent years. Public Liability insurance from Tradesman Saver starts at just £53 per year and is one of the most cost-effective policies available on the internet.
What does public liability insurance cover?
Public liability insurance provides protection against a range of damages and injury claims brought against your business. It also offers you protection for any accidents that you might encounter whilst working, such as loss or damage to any third party property. Your public liability insurance will also include cover for any legal expenses incurred in defending any claim made against you or your business.
How do insurers calculate the cost of public liability insurance?
Multiple factors are taken into account by insurers when calculating a premium for your business. The most common of them includes the nature of your business, the industry you work in, where you work, and the scale of works undertaken. Each type of construction work comes with a different degree of risk, so all insurers will want to assess the level of risk your business presents before providing you with a quote. Put simply, the price of your public liability insurance will vary dependent upon your trade.
Insurers calculate the premium for your public liability insurance based on the likelihood of you making a claim, as well as the cost of any possible claim. This means that your premium might vary depending on the level of risk posed by your business.
If an insurance company perceives your business as risky, your premium may be higher. For instance, if you or your employees work in high risk locations or your job could potentially cause a lot of damage if it went wrong, it is likely that your policy will come with a higher premium. An example would be a plumbing and heating engineer where the cost of damage caused by a leak at a customer’s home following an incorrectly fitted radiator, could be very large. However, if your trade is relatively low risk such as a painter and decorator or a carpenter, you will pay less.
How much does it cost to insure a small business?
As above, the cost to insure a small business will vary depending on a number of factors although the cost to insure a small business will be lower than the price that a larger business would need to pay to insure itself.
This is because if you are doing more work, you’re more likely to make a claim. It’s also because larger businesses tend to have more business property and are working on larger projects, so if there is a claim there’s the potential for that claim to cost more for the insurance company to settle it.
However, the cost of your insurance is almost certainly going to be less than the cost of a claim if you experience an unexpected loss, so the cost of your insurance should be considered an investment rather than an expense. Even if you don’t need to make a claim, the peace of mind that insurance gives you has a value, and as some of your clients will insist that you have insurance, the fact that you’re insured can mean that you have more opportunities to work.
What level of cover can a business get?
The level of cover your business can receive when it comes to public liability insurance depends on the degree of risk of your trade, how popular your business is and your turnover, and any additional insurance options that you may choose alongside your main cover.
As a rule of thumb, insurers generally provide businesses with £1 million of public liability cover as a standard, but you can opt to extend this cover up to £5 million (or sometimes even £10 million) for an additional premium. A higher level of cover may be necessary for those who work with public sector contracts, as these may need a higher level than the standard cover. Examples include any work done for councils, shopping centres or local authorities.
Are there any penalties for lack of cover?
Even though public liability insurance is not compulsory in the UK, you should think about taking it out as part of your business insurance policy. It offers you protection if any member of the public or a customer, makes a claim against you for damage to property or injury suffered because of your business – a safeguard you cannot be without. The only compulsory type of insurance your business needs to have is employers’ liability insurance if you hire staff, and you may be fined up to £2,500 a day if you don’t have it.
To avoid this, make sure that you have the right type of cover from the beginning, and check the government guidance if you are not sure whether your business should have this kind of insurance.
