What is Public Liability Insurance?

When you run a business, you run the risk of suffering damages regularly. That’s why you insure your business as well as its properties in case something happens to them. But what about the damages YOU cause running a business? Who will take care of the people suffering damages when they are on your premises or your actions cause damage to them?

This is where public liability insurance comes in. If a member of the general public suffers any kind of damages when they are on the premises of your business or either you or any one of your employees cause any damages to them, they can then press claims against you. Your public liability insurance will then pay them. 

Public liability insurance covers not only the damages suffered by the general public but also protects you. For example, you are the owner of a small coffee shop. While serving coffee, one of your employees spill the beverage on the laptop of one of your customers. Now the customer wants to claim the price of their laptop. 

If you didn’t have any public liability insurance, you would have to pay the entire cost of the laptop out of your pocket, but you didn’t even cause the damage in the first place. But due to having the policy, you are now protected against the claims made by the general public who has suffered while on your business premises.

Public liability insurance is not a one-dimensional policy. There are multiple PL insurance types out there that cover a whole variety of damages.

Let’s take a look-

• Self-employed Liability insurance: This covers damages anyone suffers while they are at your business premises. 

• Contractor’s Public Liability insurance: This protects the consumers from damages caused by you when you work at their homes. 

• You will also need public liability insurance if you have people delivering items for you and they damage the property of others. 
• Also, if people come into your home to get your services and they suffer any damages, public liability insurance will protect you.

To the unaware people, it might seem that public and general liability insurance are the same. But the reality is quite different. Public liability insurance covers the members of the general public, but what about your own employees, or yourself? What happens to them if they are injured while carrying out their duties or they are on your premises?

This is where general liability insurance comes in. Not only does the general liability insurance covers the members of the general public, but they also cover everyone else. So, if any one of your employees or yourself gets hurt while working, they or you will be covered by this insurance. 

The coverage of public liability insurance is quite small, so they are cheaper. But general liability insurance coverage is very large and widespread. As a result, this insurance is quite expensive, especially when compared to the previous insurance. But the cost is worth it as a lot of damages are covered by it.

There are a lot of insurance out there that have concepts close to that of public liability insurance which might confuse people who are looking for an insurance policy. Let’s take a look at other related insurance policies. 

1. Product Liability Insurance

The main difference between public and product liability insurance is that this insurance is needed to protect you if you are a manufacturer and your products cause damage to anyone. If they make any claims, the product liability insurance will cover your payments. 

2. Professional Liability Insurance

There is a significant difference between public liability and professional indemnity insurance. This difference is that instead of covering physical damages like the former one, the latter insurance covers the legal fees if someone is not happy with your work and decides to sue you. 

3. Equipment or property Insurance

What happens when you or one of your employees damages the properties of your own business? You need to have the equipment or property insurance for you to be protected against these damages. 

4. Worker’s compensation

As mentioned earlier, public liability insurance doesn’t cover the damages suffered by the workers of your business establishment. You need to pay the injured employees a worker’s compensation to cover their damages.

If you are running a business, having public liability insurance is a must so that you don’t have to pay a hefty fee to cover damages.

But due to the scope of this insurance being quite small, some insurance companies don’t even offer public liability insurance, rather they suggest that you take general liability insurance.

1. Do you legally need public liability?

While it is recommended that you have public liability insurance while running a business, you are legally required to have it. But it is not recommended to do so. 

2. What can be claimed under public liability?

Here is the list of things that can be claimed under public liability insurance:

• Medical expenses
• Travel expenses
• Payment for lost income
• Domestic assistance
• Lump sum amounts for injuries and future losses. 

3. Who is exempt from public liability insurance?

Not all businesses are allowed to have public liability insurance. If you have a business that has no employees or you are running a family business, you will be exempt from public liability insurance.