Public liability insurance covers you if, as a result of a mistake you make, a customer or a member of the public suffers an injury or damage to their property.

Claims of this sort can be enough to financially cripple a business, so it is important that you are insured. Public liability insurance should cover not just the compensation payment, but also the associated legal fees and treatment costs that the NHS might try to recover from your business.

Do I need it?

You need public liability cover if you receive visitors to your premises (even if you work from home), or if you or your employees work outside those premises. A costly accident could arise from a mistake as simple as a laptop cable left trailing in a client’s office and, as hard as you might try to avoid them, these accidents do happen.

Public liability insurance is therefore vital not just for your business’s financial stability, but also for your own peace of mind.

How much cover do I need?

Public liability cover is available at a range of levels. You need to make sure that your business has sufficient cover, as being underinsured can be as bad as being uninsured.

The cover is normally available from £1 million – but this may well be insufficient for your business. If your activities are particularly high-risk, you are likely to need more. You should also note that public sector clients often demand cover of at least £5-10 million.

A single compensation claim can be enough to close a small business. Public liability insurance is a key way in which you can protect yourself from a nasty surprise.