Kingsbridge: business guide to public liability insurance

When someone gets injured in the workplace or has their property damaged, they naturally want to know who’s to blame.…

When someone gets injured in the workplace or has their property damaged, they naturally want to know who’s to blame. Their next question is likely to be “am I entitled to compensation?”. That puts you in danger of legal action and, as a contractor, you’re especially vulnerable in these situations.

Public liability insurance (also known as PL) provides insurance cover if a client or a member of the public sues you, claiming that they have been injured or had their property damaged because of your business activities.

Public liability insurance is key for contractors. When you’re self-employed, you can’t call on an employer’s insurance policy to protect you from financial damage following an accident. This is where a PL policy steps in to protect you and your business. In this guide, we’ll provide answers to key questions about public liability cover, including:

What is public liability insurance?
Do you need this insurance?
What does it cover?
How much cover do you need?

Public liability insurance explained

Public liability cover protects business owners against claims of damage to property and physical injury to third parties. It covers the cost of legal expenses and any compensation or financial settlement resulting from the legal process.

When a policy refers to “third party”, this can mean clients, customers, visitors or members of the public who are passers-by.

Do I need public liability insurance?

As a contractor, you have a duty to protect anyone affected by your activities. With public liability insurance in place, you’re taking care of that duty while protecting your business and livelihood.

If you do not currently have any Public Liability cover, you are leaving yourself unprotected and at risk of being sued. This could result in paying legal fees and compensation if you lose the case.

Legal action against you could arise from several situations including:

If you work on-site or at a client’s office
If you work in public areas, such as building sites
If people visit your premises
If you visit people’s homes or business premises while working

There’s a measure of risk in every industry. At Kingsbridge, we find that contractors in the following sectors have specific insurance requirements that are fully covered by our specialist insurance package, which includes public liability cover:

Another reason why you may need this type of insurance is that end client contracts often insist upon it. You may find that a contract stipulates that you must have public liability cover in place.

What does public liability cover?

Bodily injury or property damage to a third party
Compensation payments
Repair costs
Professional fees
Medical fees

Examples of public liability insurance claims

Any mishap associated with doing your job can lead to a claim. Here are just a couple of examples:

A site engineer accidentally kicked over and broke photographic equipment belonging to a colleague. Their policy covered the cost of providing replacement equipment.
A self-employed IT technician was working at a customer’s site. They accidentally knocked a cup of coffee over, spilling it all over a client’s expensive laptop. The customer sued the IT technician for the cost of a new computer.

A small accident can result in a claim for negligence and an expensive court case. But a public liability policy, such as those offered by Kingsbridge, will cover the legal fees and any compensation you are required to pay, providing peace of mind. In rare cases, the legal fees can be so high you could potentially lose your business. You’re protected if you can claim it all back through your public liability policy.

What’s not included in public liability insurance?

Public liability insurance will not cover any injury to you. For that, you need personal accident cover. Nor does it protect you if a claim is made against your business by an employee. To cover that situation, you need to have employer’s liability insurance.

Damage to property belonging to you (the policyholder) or in your custody is not covered under public liability insurance. The only exception is if you work within the media industry and have taken out a media-specific policy that covers your professional equipment.

How much public liability insurance do I need?

Different businesses need very different levels of cover. The amount of cover you need depends on:

Size of your business
Level of interaction with the public
Scale of contracts
Claims history
Industry risks
Contractual requirements from your end client

If you work from home and only occasionally meet a member of the public while working, your risk level is low. Someone who deals with customers all the time, or works in busy public places, needs more cover.

Other factors, such as the size of the contract, your history of previous claims and the risks inherent to your industry, can also come into play. For example, contractors working in areas of higher risk, such as construction or offshore energy locations, will need a high level of cover.

So, while there’s no legal limit to the level of public liability insurance a contractor is required to hold, our lowest level of cover will provide up to £1 million, however, Kingsbridge can cover up to £10 million.

Is public liability insurance compulsory?

There’s no legal obligation to have PL insurance, but it’s important to consider the possible consequences of not buying protection. For instance, if someone slips on a patch of oil or a coffee spillage causes damage, you could get sued. You’ll need to pay a solicitor to handle your defence, and the costs escalate quickly. If you lose a case, you may have to pay compensation, plus the costs of the person who brought the case against you.

Even if you win the case, you’ll have to pay the legal fees and hope you can claim some back from the person who sued you.

Why choose Kingsbridge to protect your business?

Our insurance package is specifically tailored to the unique needs of professionals working on a contractor basis. Each member of our dedicated team understands the requirements of busy contractors and freelancers. We know you need a friendly service that keeps cover simple and leaves you free to focus on great work.

We know money’s tight for contractors too. At Kingsbridge, our Price Promise guarantee* gives you peace of mind that you won’t find an identical comprehensive contractor insurance package at a lower cost anywhere else.

Ready to find out more? Use our immediate get a quote service, call 01242 808740 to speak to our friendly team, or complete our enquiry form.