Public liability insurance: why you need it

By Patrick Sheerin on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Most businesses will need to take out public liability insurance – especially when working on the road. But what is it, what exactly does it cover and how much does it cost? Patrick Sheerin from Romero Insurance Group explains all.

Public liability insurance definition

Public liability insurance is an insurance policy that covers the cost of legal action and compensation claims made against your business. It is specifically designed to protect against incidents involving the public, i.e., if a member of the public suffers injury, or if they suffer damage to their property because of your business. They may make a claim and take legal action against your business even if it isn’t your fault.

Is public liability insurance a legal requirement?

Public liability isn’t always needed, but local authorities, event organisers and local authorities do require it more often than not. It’s available to anyone who runs a business, event or service. Many vendors and venues will require proof of public liability insurance to allow you to utilise their services.

It’s generally advisable to consult with an insurance professional or a licensed insurance broker, who can assess your specific needs and inform you of what level of public liability insurance you require.

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What does public liability cover?

Public liability insurance policies vary in level of cover; however, they usually incorporate these elements:

Accidents

HSE define an accident as a separate, identifiable, and unintended incident which causes physical injury.

Damage

Property damage is separated into either:

• Physical injury to tangible property
• Lost use of tangible property that is not necessarily physically injured.

What does public liability insurance not cover?

Incidents that don’t involve the public usually aren’t covered by public liability. This type of insurance doesn’t cover accident or injury to you or your employees. Instead, those incidents would be covered by employer’s liability.

What is the difference between public liability and employer’s liability?

Public liability insurance covers claims made by members of the public whereas employers’ liability insurance covers you against employees that have experienced accidents or injury at your business.

Employers’ liability includes both staff and volunteers – anyone your business is responsible for.

If, however, you employ one or more employees, The Employers’ Liability (Compulsory Insurance) Act 1969 requires you to at least have a minimum level of insurance in effect.

Employers’ Liability Insurance explained – Judith Rutherford gives a summary of which businesses need to get Employers’ Liability Insurance and why they should be getting it

How much is public liability insurance?

When quoting for public liability insurance, insurers will consider information like:

• The nature of your business
• How much cover you want to take out
• The risk to the general public
• The size and type of event
• Previous claims history
• Good housekeeping

If you speak to your insurance broker, they’ll be able to produce a tailored quote based on your business.

The most affordable solution for public liability insurance for an event is Insure Our Event. Insure Our Event uses a comprehensive quote form which will learn about your event and provide you the most affordable suitable insurance solution.

How much insurance do I need?

There is no definitive answer because the nature and risk of each business is different.

Cover typically starts at one million pounds, which is suitable for most small businesses. Councils and vendors will usually only accept levels over £5 million, hence that should be considered for event organisers.

Cover can be extended by £2 million, £5 million or even £10 million and more, depending on the protection required to cover the risk. The amount of cover you need will also vary on the size of your business and the perceived risk to members of the public.

For example, if you’re hosting a music festival it may be wise to take out a larger amount of cover due to the many risk factors which could cause injury such as alcohol, electrics and weather.

Ultimately, it’s best to get as much cover as you can afford – it’s always better to be over than under insured.

What types of event insurance are available?

To ensure a smooth-running event, you’ll want an insurance policy which covers what you need and doesn’t charge you for the cover you don’t. Every event is different, so below we have listed some general tailored insurance packages to give you an indication.

One-off event insurance

One-off events, as the name suggests, are events that have a limited lifetime, like birthday parties, carnivals and charity events.

Most one-off events aren’t high cost, but this can change depending on the event. High risk events, for example, carry a high insurance value because of the increased risk.

Wedding insurance

Imagine what could go wrong; a supplier or caterer could let you down last minute, the venue may cancel, bad weather may ruin your outdoor plans, or the entertainment may not show up. Cover your wedding costs and deposits with the best UK wedding insurance provider and decide what level of cover you require through our layered quote form.

Festival insurance

Festival risks are unique, and therefore the insurance policy to cover them has to be unique as well. Out of the million things to consider when organising a festival, insurance can sometimes be the last thing on your mind. But it’s one of the most important things to remember.

Market stall and stallholder insurance

Most stallholders will be required by law to have public liability insurance. Insure Our Event also recommends event equipment cover, event cancellation cover and employers’ liability insurance.

Whether it be at a village fete, a town market stall or at a local craft fair, Insure Our Event will assess your needs and requirements and curate the perfect policy for you. Its stallholder insurance is flexible, able to cover only the areas you require for the ideal tailored policy.

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Cancellation or abandonment

If you’re hosting the event outside, you have the added stress of unpredictable weather. Even if you’re hosting a small festival in the UK, you should still consider the risk that adverse weather could have on your event.

Cancellation or abandonment insurance affords you the peace of mind in the event that adverse weather conditions cause the event to be cancelled.

Weather isn’t the only reason an event might be cancelled. Festival insurance covers a range of social and legal issues that might cause your event to not go ahead. Whatever it is, if it isn’t your fault, it’s likely you’re covered.

Event equipment insurance

Whether your equipment is leased, hired or owned, event equipment insurance protects it from loss, damage or theft during the event.

Insure Our Event will cover your equipment for up to four consecutive days per single event. This makes sure you’re covered while you set up for an event.

Musicians and performers insurance

An injury to your property or a member of the public during a performance can be a real mood killer. After all the preparation, your great performance can turn sour leaving you with a hefty bill from a large claim.

Even if you’re a solo musician you should still consider getting public liability insurance. And remember, you don’t need to be playing in a venue to think about protecting yourself from accidental claims. That’s especially true if you’re teaching a member of the public either in public, or in their own home.

As a musician, your instrument is your most important piece of equipment. So, you may want to look as business equipment insurance as an optional extra with your public liability insurance. This insurance will cover your equipment if it’s damaged or stolen.

Multiple event insurance

Multiple events insurance is specialised insurance for businesses hosting more than one event. Instead of insuring each individually, if they’re all similar types of events, one policy can help streamline the process. And they’re often discounted versus the cost of insuring each event.

Multiple events insurance can be tailored to exact event requirements, but as a general rule they’ll include both public and employers’ liability cover. To qualify for multiple events insurance, the event must be a repeat (such as a mud obstacle event) where the event carries the same risk each time and they can’t be any longer than three days.

Where can I buy public liability insurance?

For a large corporate businesses or a small enterprise, Romero Insurance Brokers can provide public liability insurance. Their internal claims department will swiftly handle with each public liability claim, and they provide plenty of information and guidance to clients.

For an event organiser or anyone planning on hosting a party or festival, Insure Our Event provide the best public liability insurance prices. Fill out their quote form to price up your event. Limits available are £1 million, £2 million, £5 million or £10 million.

Remember, venues and local authorities are likely to want proof of your public liability insurance before allowing an event to take place.

Patrick Sheerin is content and SEO manager of Romero Insurance Group

More on small business insurance

Employers’ liability insurance – don’t get caught out! – Whatever the line of work, all small businesses will carry an element of risk which could affect its staff

Small business insurance: An essential guide – A look at what cover is out there and the policies you may require for particular needs.

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