Public liability insurance is probably the most common type of insurance that businesses need. It’s for claims made against you, your business and your employees because of injury caused to someone or damage caused to another person’s property because of your business activities. That someone could be a customer, a supplier or even a member of the public. Policies also include product liability to protect you against liability claims from the products you sell.
With tradesman public liability insurance, your work is your product. You need it if your customers come to you and if you go out and about to see them. In fact, almost every business needs it because accidents can happen to anyone.
It could be as simple as a customer slipping over on your floor, or damage caused by installing faulty equipment. Claims made against your business can be expensive and if you’re found negligent, it’s you that has to pay. Except if you have public liability insurance, your policy pays, not you. Your policy usually covers legal and defence costs, compensation for personal injury and compensation for property damage, so having it means your business won’t come crashing down even if somebody else does.
If you run a business, anyone can make a claim if they believe they’ve been injured or that you or your employees damaged their property. Public liability insurance guards against claims that can cause stress and cost you time and money. Putting public liability insurance in place takes away many unknowns so you can get on with running your business.
The short version is that in the UK, under UK law from the second you start a business whether you’re a sole trader, a partnership, whether you’re a limited liability company, from the very second you start a business you must have public liability insurance. That is the end of it. You have to have it, by law; you have to have public liability insurance from day one.
Employee Liability Insurance
From the second you become an employer in the UK, if you’re a sole trader and you hire someone. If you’re a partnership and you hire someone, you must have employee liability insurance from day one too, no excuses.
Here’s a bit of a twist for you. When my grandfather started his business he was just a one-man-band but he became a limited company. And as he became a limited company overnight he went from being just him to being an employee of his own company. So even though he was the only employee and never likely to sue himself. He still, by law, had to have employee liability insurance.
I hope this information helps you out. You may think, “Oh well, yeah I’m not going to bother with insurance, I’ll risk it. I’m not paying the extra £20 a month”. Or whatever it actually is these days, and that’s entirely up to you, but you could get in some serious trouble.
Also remember your insurance premiums for your vehicles, your public liability insurance and your employee liability insurance. All of that is tax-deductible, so it’s not actually you paying for it, anyway. You can either give that money to the taxman or you can use it to pay for your insurance instead.
So that’s everything you need to know about public liability insurance, employee liability insurance and, of course, don’t forget your vehicle insurance as well! Let me know if you have any questions in the comments below.