Buyer's Guide to Public Liability Insurance

Owning a business is very expensive. public liability insurance, while costly, will save a company from paying out of pocket if an accident occurs. Shopping malls, grocery stores, restaurants, bars, clubs, contractors, outdoor businesses and many others that interact with the public would benefit.

With an ever-increasing part of your company's budget going on insurance, you are probably very selective when it comes to taking out an insurance policy. Insurance is yet another expense on a never-ending list, so you are, without any doubt, very careful about the cover you opt for.

If you're looking for ways to cut business costs, make sure you are completely aware what PL policy you're buying, check what's covered, don't buy more than what you need, and always shop around for the best deal. But also remember that choosing the cheaper option can lead to greater costs - so, the questions is: how to find the best value PL insurance?

Who Is It For?

If your work means members of the public visiting your premises or you visiting third party's premises while performing your work, then you should think about taking out public liability (PL) insurance. In general, if you come into contact with the members of the public, including but not limited to your customers (including if you work from home), then your business should be covered by public liability Insurance.

Generally speaking, public liability insurance is not compulsory, but there are businesses which are required to have it (horse riding centres, for example). Other business owners may also notice that many customers want to see proof of PL insurance cover before they will let you work for them.

What Is Covered?

Public liability insurance covers any damages to the property of the public or injury to a member of the public caused by you or your business. It may also cover any related:

• Expenses and costs - all expenses and costs needed to cover any repairs 

• Legal fees - should any claims be made against you, all fees for court proceedings will be covered

• Hospital treatment and other medical expenses, including ambulance costs should the NHS claim against you.

• Compensation claims - for any claims on damage that happen on your property or caused by your services. The amount of the compensation claim is covered by public liability insurance.

How Much Does PL Insurance Cost?

Hospital treatment

The amount your will have to pay for PL insurance premiums depends primarily on the nature of your business and how likely your business activity is to cause damages or injuries on the public. When working out your quote, the insurance provider will assess the level of indemnity that is applicable to your business. Standard Public Liability insurance policies are set incrementally, with limits typically being set at £1 million, £2 million, £5 million and up to £10 million.

Also, premiums may vary from company to company.

The first factor in determining the cost of insurance is the type of business. For example, a grocery store will pay a lower cost than a construction company. Grocery stores will deal with injuries like a fall from a spill and food poisoning. On the other hand, a construction job has the dangers involved with heights, heavy machinery and sharp tools. Construction is riskier, so the price will be higher.


Another element is the size of the business. A small computer repair shop that employs two people will have a relatively low premium. Contrarily, a retail store that has 200 employees in a large building will spend more. This is due to greater foot traffic and more space for an accident to happen.

Lastly, the location of a business will have an effect on the price of coverage. A restaurant in the city will pay more than its rural counterpart because of the higher volume of people. Market value of a property will also be considered. A factory located on a river will have a costly premium because of the potential for water pollution. Older buildings with structural or electrical issues will also raise insurance prices.

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The information on this page is designed to help you understand more and make more informed choices. We do not receive any commissions, instead we are funded from companies that we advertise on our website.