If you carry out your contract work on client sites, or clients visit your premises, you should consider taking out public liability insurance. This will cover you against third party claims for property damage or personal injury.
What is public liability (PL) insurance?
In a nutshell, public liability insurance covers businesses against third party claims for:
- Personal injury.
- Property damage.
- Legal costs and any compensation.
If you are a contractor, here are some example scenarios where public liability cover would come into play:
- You wire up a new server but accidentally damage some peripheral equipment while completing the job.
- A client visits your office to discuss a project, but trips over some poorly stacked storage box, causing an injury.
Why would a contractor need public liability insurance?
Unlike Employers’ liability insurance which is mandatory (if you have employees), there’s no legal obligation to take out PL insurance.
However, there are several compelling reasons to do so:
- Clients often insist that contractors are ‘adequately insured’. This means that your company has a specific amount of Professional Indemnity (PI) and Business Liability cover in place.
- If you’re taking out Professional Indemnity insurance, insurers often provide business liability for a small extra fee – perhaps a mere £100.
- If you hire other people to work for your company, then they could be responsible for actions which result in a public liability claim against your business. So you should take out a policy if you have employees.
- Ultimately, you will have the peace of mind that in the unlikely event that a claim is made against you.
- You are covered for the costs of defending the claim, together with any damages. And the cost of cover is inexpensive.
How much does it cost?
Business liability insurance – in general – is very competitively priced. A small business could take out cover for under £5 per month. Premiums are calculated according to various factors including:
- Your turnover – larger businesses have more scope for claims to be made.
- The type of industry you work in – the risk profile varies enormously between types of business.
- The location of your business – home office, shared office space, large premises. It all depends on your profile.
- How much cover you have chosen – typically £5m or £10m.
- Your past claims record – you are viewed as a higher risk if claims have been made against you.
Things to look out for when comparing quotes
- Specialist insurers typically provide £1m of PL cover, which can be increased to £5m or even £10m. A limit may also be specified by your client as a condition of the contract.
- You’ll usually find PL bundled with EL (Employers’ Liability) cover – and typically included as an option when you apply for a Professional Insurance policy.
- If you purchase all three policies together, you will save money compared to buying standalone policies.
- You can take out a PL policy on a standalone basis if you don’t need EL cover. Check the total costs of all your combined quotes, as – once again – a ‘package’ may be cheaper.
How to get a public liability quote
Visit our long-term insurance partner, Qdos for a quote and to find out more. Get cover for as little as £4.58 per month.