Self-employed people operate a diverse range of businesses. Some of those businesses involve more hazardous trade processes than the others. Some of those businesses involve more contact with members of the public than the others.
So, given the wide range of different types of self-employed business, who needs self-employed public liability insurance and are there any self-employed businesses that don’t need it? We took a look at the topic in more depth.
Hazardous trade processes
Certain self-employed businesses involve fairly hazardous trade processes. The construction sector is a good example this.
Clearly, an architect sat in front of a computer is less likely to injure a member of the public, or damage their property, than a roofing contractor who may be working at height. The roofing contractor runs the risk of dropping things onto people and their property below, or runs the risk of starting an accidental fire due to using heat in their line of work.
It’s because of these varying circumstances that vary from self-employed business to self-employed business, that insurance companies take the different levels of hazard and risk into their pricing – meaning a roofing contractor will be paying more for their insurance than an architect. But because the architect is someone who will be coming into contact with members of the public, whether those members of the public are clients or suppliers, there is still a risk that those members of the public could be injured or their property could be damaged, as we continue to explore below.
Contact with the public
Because self-employed public liability insurance covers a business against claims for injury or property damage made by members of the public, that allege the business in question caused the injury or damage, someone who regularly comes into contact with the public is more likely to have a claim made against them because there is an increased likelihood of injuries or property damage occurring.
For instance, a handyman working on private houses will be seeing members of the public on a daily basis, whereas someone who specialises in repairing dry stone walling in the countryside may not come into contact with members of the public anywhere near as frequently.
The level of hazard will be similar, but because the handyman is coming into contact with members of the public more often, the likelihood of a member of the public having to make a claim for injury or damage is higher.
Again, the insurance companies know that certain trades involve an increased level of contact with members of the public and they set their prices accordingly.
Potential size of claims
Even though some self-employed businesses are less likely to cause an injury or property damage due to the low-hazard nature of their operations, or the fact that they have less contact with members of the public, this does not mean that there is no chance of an accident. And the problem is that when an accident occurs, this can lead to a substantial compensation claim.
Severe injuries can result in compensation claims that cost hundreds of thousands of pounds. Property damage, particularly where fire or flood damage to commercial premises is involved, can easily cost millions of pounds.
So, who needs self-employed public liability insurance?
The short answer to this is everyone who is self-employed needs public liability insurance.
Accidents cannot be prevented if you are coming into contact with members of the public. Although if you need to use hazardous trade processes in your business, you are more likely to have an accident, even low-hazard trade processes can cause accidents. And when an accident occurs, the potential for that accident end up costing a significant amount of money is there.
Anyone who comes into contact with members of the public, no matter whether this happens relatively infrequently, and no matter how low-hazard their trade processes, is someone who needs self-employed public liability insurance to protect themselves and their business against the cost of potential compensation claims.