PLI is generally considered an essential cover needed by the majority small and large businesses. While there are many types of business policies offering varying complexity, cover for public liability, although not required by law, is highly recommended when your business premises are open to the public.

The law requires a similar type of cover, known as employer’s liability insurance, for businesses that have employees. In many cases, you can purchase you public liability cover bundled together with an employer’s liability policy.

Do I need PLI?

Here are some questions that you can ask yourself to determine whether you should take out a premium for your business.

  • Is your business a storefront or otherwise open to public visitors? If someone comes into your store, restaurant or office and slips on a wet floor or gets sick after eating the food, you could be liable for damages due to negligence on your part.
  • Even for businesses that do not have regular visitors, you may still benefit from cover. For example, if you work regularly on other people’s property, you could be liable for damages while on the job. For example, if you drop some tools on a client’s computer monitor while working on a ladder you could be held liable for damages.
  • Do you have employees that work with the public? You could be liable for any of their actions while on the job that causes harm to members of the public.
  • Do your clients have requirements that their contractors and suppliers have PLI cover?

What does it cover?

Public liability will pay for claims resulting from negligence on the part of your business that causes damage to members of the public. The insurance covers actions by employees and it can also protect against damage caused by products you offer.

Depending on the specific policy, the plan can cover:

  • Legal fees and costs
  • Hospital treatment that the NHS claims from you
  • Other damage-related costs.

What does it cost?

The premiums can vary depending on the type of business and the level of business activity. For example, businesses that pose higher risk to the public will need to pay higher premiums. Business with high turnover will generally pay higher rates, for example, a store with large amounts of foot traffic will pay more than one with less traffic with everything else being equal. Brokers can offer discounted rates in order to beat out the competition, so it pays to shop around compare prices.

The cost of insurance also depends on the amount of cover that you choose to protect your business. Generally, the minimum amount of cover available for businesses is £1 million. If your company bids for government contracts, there may be a requirement for cover ranging from £5 million to £10 million.

Comparing different policies

When comparing public liability insurance plans offered by different providers, make sure to read the fine print so you know exactly what you are getting for the price. The policy details can vary widely, so do not assume that they all cover the same things.

Here are some important items to look out for when reading the policy:

  • Cover limits – Each policy provides a certain amount of of cover in cases of a claim. Make sure that cover limits are adequate for your needs.
  • Exclusions and exceptions – Look over these carefully or else you could get a rude surprise if you need to make a claim. For example, does the policy cover employees who work on ladders or who deliver products by car? Often cheaper policies look great in terms of cover limits, but they are full of exclusions to the liabilities covered. Common types of exclusions pertain to working with radioactive materials and asbestos, and damage caused by terrorism or war.
  • Excess – Policies will require that you pay excess before they award any money for a claim. The purpose of the excess is to prevent clients from making too many small claims. In some cases, you can lower premiums by taking on additional excess.

The company you keep

In addition to examining the policy terms and conditions, it is also a good idea to check on the company to ensure that it is reputable and reliable. You will want to avoid providers that hassle customers when they make a claim. Company ratings and reviews can help consumers in researching insurers. Some large financial firms provide ratings of these providers that give consumers an idea of their financial strength. This information is important particularly in times of economic downturn.
You can also find reviews and ratings that give you an idea of the type of customer service that the company provides, i.e., are they courteous and helpful during the claims process.