Why do you need Self-Employed Public Liability Insurance?

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Like a lot of businesses, you can probably see why you’d need motor insurance. Without it, you could end up facing a fine, several points on your driving licence and even a ban from driving. Once you have a conviction for driving without motor insurance, getting insured in the future becomes a lot more expensive.

Similarly, pretty much everyone understands why they need to insure their tools, equipment, stock and materials against loss by accidental damage or theft. They are the tools of your trade, and without them, you cannot work.

But you’re careful in what you do. You have many years of experience. You’ve taken all of the training that’s available. You haven’t had an accident in over a decade. So why, in that case, do you actually need self-employed public liability cover?

What does self-employed public liability insurance cover?

Self-employed public liability insurance covers you against compensation claims made by a third party that alleges something you have done has caused damage to their property or has resulted in them being injured.

It also covers the legal costs that will be incurred in the event of such a claim. This is important because, in the event of a claim being made against you, the legal costs can be substantial. It also means that you have a legal team that will be working on your behalf to handle the compensation claim.

Risk is everywhere

No matter how careful you are, accidents can still happen. You don’t need to be working in a hazardous occupation, such as asbestos stripping, for accidents to happen.

You could put a power drill down for less than a minute while you get a different drill bit, and if a member of the public injures themselves by tripping over the cable, you could wind up facing a compensation claim. One moment of inattention with an angle grinder could result in a fire that destroys a large building and its contents.

And if when a claim like this happens, it doesn’t matter whether you’re a small business or even a one-man band when the amount of compensation is calculated. And the amount of compensation payable, combined with the legal and other expenses, can be substantial.

Claims amounts

Clearly, if you start an accidental fire it’s going to be expensive. Even if it’s only a private house, you could easily get to £100,000 for a small fire once temporary relocation costs are taken into account. In commercial premises, the cost once loss of revenue and legal fees are taken into out could run into millions of pounds.

Injuries can also be expensive claims to settle. Here are some examples:

  • Severe facial scarring – £60,000
  • Permanent hip injury – £85,000
  • Foot/leg amputation – £150,000
  • Blindness – £35,000 (one eye)/£175,000 (both eyes)
  • Brain damage – £250,000
  • Neck injury causing paralysis – £260,000

Of course, these claim amounts do not take into account any loss of wages that the claimant incurred as a result of the accident, and nor do they include the legal costs and other expenses. Once those costs are added in, these compensation amounts can be considerably higher.

Protecting your business

Most self-employed businesses could not afford to pay such compensation claims and would find themselves struggling. Also, handling large property damage claims or compensation claims for serious injuries is complicated and requires specialist legal expertise.

So why do you need self-employed public liability insurance? Because it gives you peace of mind, as it protects your business in the event that a compensation claim is made against you that could potentially bankrupt you and your business. As well as this, it also gives you access to a legal team that can handle the compensation claim on your behalf, leaving you free to carry on trading.

Self-employed insurance UK requirements

There aren’t any specific requirements involved if you want to take out a self-employed insurance policy however, there are some crucial details that you’ll need to consider in order to get the right policy for you.

Firstly, things like how long you’ve been trading and accurately picking trades that encompass all the work you do is really important for ensuring you get a quote that reflects the cover you need. For instance, if you work with heat, you’ll need to ensure that your policy covers work with heat otherwise you’ll find yourself in a tricky situation when it comes to making a claim.

Another important consideration is the level of cover that you purchase. Higher indemnity limits mean you’ll be covered for bigger claims, but paying for much larger claims than you’re likely to face is counter-intuitive and you’ll end up over-paying, whereas on the flip side, if you don’t take out a high enough indemnity limit, you’ll end up without adequate cover if you find yourself up against a big claim. Therefore, it’s advisable to truly consider the limit of indemnity that your business will require before taking out your quote to ensure you get the best deal possible.

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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 £58 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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