As a small business owner, you face various dangers, including business property damage and personal injury. If you run a retail store, your clients may be injured if they slip on a wet floor.
Similarly, while working on a construction project, you may cause harm to a neighbor’s property. So in such cases, public liability insurance protects you against the financial consequences of a claim by third party.
Public liability insurance usually is not required by law, but it is strongly advised if you run a business and interact with the peoples, clients, and contractors.
Many customers and clients like to do business with organizations that have public liability insurance because it gives them peace of mind as their business property is also protected.
Who needs public liability insurance?
Public liability insurance can benefit almost any type of business with people interactions. Here are a few examples of businesses that benefit from general liability insurance:
- Retailers
- Cafés and restaurants
- Hairdressers
- Builders
- Manufacturers
- Licensed businesses
- Event planners
- Contractors
- Consultants
- Freelancers
Why Do I Need Public Liability Insurance?
Public liability insurance protects your business from the financial consequences of a claim made against you.
For example, if a customer slips and falls inside your business site and suffers any bodily injuries, you would be responsible for medical bills and lost wages.
There are several reasons why you need public liability insurance:
Protect financial loss:
If your customer gets injured or suffers property damage from your business activities, a public liability insurance policy will provide coverage for legal costs and compensation payments.
Customer Protection:
liability insurance protects customers’ and clients’ property and life by providing a safe and professional service.
Business Credibility:
Public liability quote protects your business reputation and improves your credibility with customers, suppliers, and partners, who take this as a sign of stability and professionalism.
Reputational Harm
Public liability coverage protects against reputational harms as well. For example, if someone says something negative about another company, your reputation and business activities may suffer from it, and the loss is covered by insurance.
What Does Public Liability Insurance Cover?
Professional liability insurance covers following incidents:
- Bodily injuries to a customer or client
- Property damage to a customer, client, or members of the public
- legal costs for defending a lawsuit and claim.
- Reputational Harm
- Advertising harm
Public liability policy does not cover incidents that occurred intentionally and outside the business’s everyday activities.
Professional liability insurance does not cover business property damage or employee injuries.
How can you find affordable public liability insurance for your business?
Here are some tips to find affordable liability insurance for your business:
• Shop around at different insurance companies. Compare quotes from multiple insurers to find the most affordable option for your needs. Some companies that offer business insurance include The Hartford, Travelers, Progressive, and State Farm.
• Consider bundling your policies. If you need other business insurance like property or auto coverage, bundling multiple policies together can help you save money. Bundled policies often come with a multi-policy discount.
• Raise your deductibles. The higher your deductibles, the lower your premiums will be. Make sure you can afford the deductibles in case you need to file a claim.
• Limit your coverage to only what you need. Don’t pay for more insurance than is necessary for your business. Only choose coverage limits that meet your needs.
• Improve your business’s risk profile. Take steps to minimize risks like installing proper safety equipment, conducting employee training, and implementing loss prevention procedures. A lower-risk business will qualify for lower premiums.
• Ask about discounts. See if you qualify for any discounts, such as a discount for being in a low-risk industry or for having a good claims history. Some insurers also offer discounts for things like alarm systems, fire extinguishers, or sprinkler systems.
• Consider business associations. Joining a local chamber of commerce or other business association may make you eligible for an insurance discount through the association’s insurance partner.
• Pay premiums annually or semi-annually. Paying in fewer installments, rather than monthly, can lower your total bill for the year. Annual or semi-annual payments often come with a small discount.
What does general liability insurance not cover?
Your company’s general liability insurance does not cover all types of claims. Other insurance coverages will be required to cover the following claims:
- Work-related injuries are not covered by public liability coverage as compared to Workers’ compensation policy coverage which covers medical bills and provides them with additional benefits as they recover from a work-related injury.
- Liability insurance does not cover road accident vehicle damage, and you’ll need commercial auto insurance.
- Electronic data loss or damage
- Intentional or criminal act damage.
How much is public liability insurance?
Small business owners expect to pay approximately $63.53 monthly for Professional liability insurance. However, the cost will vary based on the level of coverage you purchase.
| Coverage of £2m | Self Employed | Partnership | Average Cost |
| Cleaning Company | £52 | £52 | |
| Event Manager | £80 | £84 | £101 |
| Professor | £59 | £82 | £111 |
| Artist | £68 | £65 | £124 |
| Engineer | £80 | £107 | £126 |
| Trader | £79 | £134 | £140 |
| Gardener | £71 | £105 | £150 |
| Builder | £82 | £127 | £226 |
We observed that over 62% of small business owners pay less than $50 per month for Public Liability insurance, while approximately 25% pay between $51 and $100 per month. The following table shows small business general liability insurance premiums.
How much public liability insurance do I need?
The amount of Professional liability insurance you require for your business is determined by various factors below.
- Your Business activities
- The number of workers you have
- Your annual income
- The items or services you provide
- The possibility of claims being filed against you
In general, a minimum of $5 million in coverage is recommended for small business owners. Some businesses may require more coverage. If you work in construction, you may need $10 million or more in coverage. It is also recommended to buy an umbrella policy to protect your business.
