Is Public Liability Insurance Compulsory by Law?

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When it comes to your business insurance it’s important you possess an adequate policy that suits the requirements and needs of your business. Tradesman Saver offers a selection of insurance packages and policies designed to provide hard-working businesses with affordable premiums that protect them when they need it the most.

But what type of insurance do you really require? We all know by now that employers’ liability insurance is a legal requirement for businesses within the UK, but what about public liability insurance? Is this a legal requirement and what does it cover you for? This guide will get to the bottom of all your public liability insurance debacles and help you find those much-needed answers for your business insurance queries.

What is public liability insurance?

Unlike employers liability insurance, public liability insurance is not a legal requirement in the UK – but that doesn’t mean you should look past it as being a costly expense for your business. Where employers’ liability insurance protects your business against claims made against it by employees, public liability insurance protects you in the face of a claim made against your business by a third party.

A third party is categorised as someone who doesn’t work directly for your business; whether it’s someone you work alongside on a building site, or a sub-contractor who you’ve hired. A third party can also be any customers or members of the general public who are affected by the work you’ve completed. Let’s consider the impacts of an incident occurring on a building site, where several members of the general public have been injured.

Public liability insurance will cover you in the event of the claims made against you, and pay any compensation packages agreed, as well as court fees for your defence, and medical bills that may be required. The small payments you’d make to Tradesman Saver would almost certainly outweigh the financial repercussions on your business than if you didn’t possess public liability insurance.

Attempting to pay these costs without adequate builders insurance could mean financial ruin for your business in addition to the diminished reputation. The amount of money that the insurance provider repays will be determined based on the amount of indemnity cover your policy possesses. The more adequate the indemnity cover you possess, the less risk you’re going to experience in the face of a claim.

Is public liability insurance a legal requirement in the UK?

Public liability insurance is not a legal requirement in the UK and is not compulsory for business owners looking to sort out their insurance. However, from a financial viewpoint, it’s well worth possessing public liability insurance if you work in a trade or if you run a business that deals with the public or any other third party subcontractors. It’s always worth having, and businesses should strive to look past the additional expense incurred by purchasing a policy.

Although you may have never experienced a claim made against your business, there may be a day when a claim is made, and you’ll be grateful that your public liability insurance can stand up and protect you. But what exactly does public liability insurance cover you for and how is it different to employers liability insurance?

What does public liability insurance cover you for?

Public liability insurance will cover you for any claim made against your business by a third party, such as a member of the public, your customers, or any other subcontractors working with your business. So, whether you’re a business with an office that customers often come and visit or you’re a business who visits customer houses or construction sites, public liability insurance will have your back.

Tradesman Saver’s public liability insurance policies cover the costs of any legal action or compensation packages made against your business, in addition to medical treatments and any transportation costs that occur from the NHS. There are varying levels of public liability insurance available at Tradesman Saver, and the size of your business and the projects you work on should be considered when looking into the scope of the cover you’re looking for. The higher the risk associated with your role, the higher the level of indemnity you’ll need. In insurance-speak, indemnity is the amount or costs that the insurance provider is willing to pay out on the claim made against you.

Typically, indemnity limits are available at £1,000,000, £2,000,000 or £5,000,000, but if you work on large sites or in public areas, you may be asked for an indemnity limit of £10,000,000.

Are there any insurance policies that are legal requirements in the UK?

Now that we’ve established that public liability insurance isn’t a legal requirement in the UK, it would be helpful to learn what the legally binding insurance policies in the UK are. Employers’ liability insurance is by far the most important insurance policy your business requires and is a legal requirement for business owners to possess within the UK.

The legal minimum amount of employers’ liability cover you are required to have by law is £5,000,000 – but most insurers typically offer a standard limit of £10,000,000.  Employers’ liability insurance will cover you against any claims made against you by an employee for any accidents at work.  It covers things like sick pay, loss of income, medical bills, legal costs, and compensation for any injuries that occur as a result of your negligence.

Why should you purchase public liability insurance?

Not only does possessing public liability insurance mean you’re covered in the face of a claim made against your business, but it also ensures you’re acting ethically within your industry. Possessing public liability insurance is a superb way of acquiring larger contracts and business connections that can help your business, as well as making your business more appealing to contractors looking to hire subcontractors and vice versa. All of this, on top of the inherent financial benefits, make purchasing public liability insurance with Tradesman Saver a no brainer.

Whether it queries you’ve had about employers liability insurance, or you’ve been looking to learn more about the legal requirements associated with public liability insurance, we hope that you’re now a bit wiser and informed about the type of insurance your business requires. For a full breakdown of the types of insurance available for businesses, don’t hesitate to call Tradesman Saver, today.

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*This indicative price is for £1m public and products liability, £250,000 legal expenses, £10,000 financial loss and £10,000 accidental death insurance cover for a sole trader. The price includes insurance premium tax and our admin charge. 22% of new customers paid less than £59 between 1st January 2019 and 31st August 2019. The actual price you pay will depend upon your specific business requirements and will be affected by your trade, your claims history and the optional covers you select which are all priced separately during the quote process. This website is intended for customers based in the UK and is therefore subject to the UK regulatory regime(s) © Copyright 2019 Tradesman Saver | Tradesman Saver and Henry Seymour & Co. are trading names of Barkdene Limited which is authorised and regulated by the Financial Conduct Authority (FRN 303965) for our insurance distribution and credit broking activities. Barkdene Limited is a credit broker not a lender. You can check this on the Financial Services register https://register.fca.org.uk/.
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