When it comes to running a business, public liability insurance isn’t essential but there is a reason why there are calls for it to be made a legal requirement. It may not be a legal requirement but if you run a business, you’re often required to have this type of insurance as a contractual requirement, as well as it being a condition of your trade body membership.

Failure to have public liability insurance can affect the way you operate as a business. It’s a legal requirement to have employer’s liability insurance and motor insurance so why not public liability insurance? 

What is Public Liability Insurance and why do businesses need it?

Public liability insurance will cover any compensation claims made against the business by any third parties whether it be a member of the public, client, customer orexecutive. If you have done something or failed to do something that has resulted in a third party suffering a loss, you are at risk of being sued and without public liability insurance, the financial health of your business could be put at serious risk.

Fighting Compensation Claims 

Nowadays, you can hardly switch on the TV or flick through the newspaper without being inundated with advertisements featuring “no win, no fee” compensation firms looking to help people manage their accidents. There is a lot of money to be made with compensation and as a result, claims can be very expensive to settle. For example, an injury that has resulted in a broken leg by someone who has slipped or tripped because of the business’s negligence can receive as much as £50,000 in compensation. If that figure scares you, a more serious injury can cost ten times that amount, and this is far from the end as the claimant may be eligible to claim for loss of earnings suffered because of the injury as well as travel expenses and legal costs. They will be seeking all of this from you. Thanks to loss of earnings claims and legal costs, travel expenses and so forth, even the most minor of claims totalling £250 can spiral into the thousands once unaccounted costs have tallied up.

Having public liability insurance is practically necessary because of this. Compensation claims as you now know, are very expensive to settle and it just takes one claim to put you out of business for good. And it’s not just costs to consider, compensation claims will come with complex legal arguments and it’s likely you aren’t knowledgeable enough to fight your case but with public liability, your insurer can provide you with a trained legal team that will help with any legal jargon and arguments. Any fees will also be covered within your public liability policy.

Because compensation claims are expensive to settle, all businesses should have public liability insurance to protect them. Not having public liability insurance could mean that you may end up be facing a compensation claim that causes your business to struggle financially, or even put you out of business completely.

There’s a lot to consider when running a business and many risks to encounter but public liability insurance reduces that strain.