Business Insurance

Public Liability Insurance

Public liability insurance (PLI) is a type of business insurance in the UK that covers the cost of compensation if your business activities cause injury to a member of the public or damage to their property. It’s especially important for businesses that interact with customers, clients, or the general public, whether on your premises or elsewhere. This cover helps protect you from potentially significant financial losses resulting from legal claims made by individuals who have been affected by your business operations.

Is Public Liability Insurance a legal requirement in the UK?

PLI is not a legal requirement in the UK, but it is strongly recommended for businesses that have direct contact with the public. Although it’s not mandated by law, some clients, contractors, or business partners may require you to have it before working with you. Additionally, without PLI, your business could face significant financial risks if a claim is made against you, as you would have to cover legal fees and compensation costs out of pocket. Therefore, while it’s not compulsory, many businesses find that PLI is an essential part of managing risk.

Does my business need PLI?

To decide whether your business needs public liability insurance, consider how much interaction you have with the public.

If customers or clients visit your premises, or if you work in public spaces, the chances of accidents or property damage increase. Think about the potential financial impact if a claim were made against you. For example, could your business afford to pay for legal representation and compensation costs if someone were injured on your premises? Even low-risk businesses should consider whether unexpected accidents could lead to costly claims. If you run a home-based business but invite clients to your property, you may still want to consider PLI.

What do I need to know before getting a Public Liability Insurance quote?

When asking for a quote for public liability insurance, insurers will need details about your business. You should be ready to provide information about the nature of your business activities, the size of your company, and the level of interaction you have with the public.

Insurers will also want to know your annual turnover and how many employees you have, as these factors can influence the level of risk associated with your business. If you’ve had previous claims or incidents, be prepared to disclose them, as this can affect your premium. Finally, think about the level of cover you need—most policies offer cover from £1 million upwards.

Does Public Liability Insurance Include Employers Liability?

The short answer is that it can do. Many insurers will offer Employers Liability and Public Liability Insurance together, as a package. But not always, and not with all policies – so it is important to check and be clear when you review insurance quotes and policies.

Understanding Employers Liability Insurance is essential for any business because it is a legal requirement for most UK businesses that employ staff, whether they are full-time, part-time, contractors, or temporary workers. It is a type of business insurance that covers the costs of compensation if an employee becomes ill or injured as a result of their work.

Employers Liability Insurance ensures that, if a claim is made by an employee, the business is protected against the legal and compensation costs. The legal minimum level of cover required by UK law is £5 million, though many businesses opt for higher cover depending on the nature of their work. Failure to have employers’ liability insurance in place can result in fines of up to £2,500 per day that the business is uninsured, making it essential for employers to comply with this regulation.

How much does PLI cost?

As with any insurance policy, the cost will be individually calculated based on your situation – or that of your business in the case of business products. Key factors influencing the premium include:

• The type of business you run
• The level of interaction with the public
• Your business’s size and turnover
• Whether you’ve had previous claims.

Higher-risk businesses, such as those in construction or hospitality, usually face higher premiums than low-risk operations like consultancy work.

To get the best value policy, shop around and compare quotes from multiple providers, ensuring you’re getting the right level of cover for your needs. Bundling PLI with other types of business insurance, such as professional indemnity or employers’ liability, can often bring discounts. Additionally, maintaining a good safety record and following proper risk management procedures can help keep your premiums lower over time.inesses in the UK.

Professional Indemnity Insurance

Sometimes referred to as PI, Professional Indemnity Insurance is a business product designed to protect you or your business from claims against you. Professional Indemnity Insurance is suited to individuals or small business that offer knowledge, skills or advice, and may be at risk of a client claiming they have suffered as a result of a mistake or negligence. Remember, if you or your business come into contact with the public in the course of your work, you should learn more about Public Liability Insurance too. PI and Public Liability Insurance are different and do different things. Your business may well need to consider having both these kinds of UK Insurance.

Do I need Professional Indemnity Insurance?

There are a wide range of professions who might find themselves in a situation where Professional Indemnity Insurance would help.

Broadly, the types of professions where Professional Indemnity Insurance is considered most valuable are those that offer knowledge, skills, expertise and advice. When you provide these kinds of services, there is always a risk that your customers or clients will be unhappy. They may feel that you or your business have made a mistake. They may suggest that important matters were negligently overlooked. Or there may be developments that lead them to feel you or your business has infringed intellectual property or been responsible for data loss or breaches. None of these are situations you want to consider, but, should they happen, you may face considerable claims made against you by the client through legal proceedings.

Professional Indemnity Insurance is often taken out by:

• Managment and Business Consultants
• Designers, Web Developers, Advertising Agencies
• Technical, Engineering or IT Consultants or Contractors
• PR Agencies
• Trainers, Tutors, and Instructors
• Surveyors

Is Professional Indemnity Insurance a legal requirement in the UK?

No. The law doesn’t require you to have Professional Indemnity in the UK. However, there are some professions that will be required to have PI by the professional or regulating body that oversees their occupation. Examples of these professions, include:

• Accountants
• Architects
• Chartered Surveyors
• Financial Advisors
• Solicitors

What does UK Professional Indemnity Insurance usually cover?

When you are comparing Professional Indemnity Insurance, you should look out for these kinds of claims that you might want to cover:

• Professional Negligence
• Errors or Mistakes
• Loss of Data
• Unintentional Breach of Confidentiality
• Defamation or Libel
• Intellectual Property Infringement

You should also have a clear understanding of what will not be covered by any UK Professional Indemnity Insurance policy that you are considering. Remember that PI Insurance will only cover claims made by a client and only claims made during the period that the policy is in place for work done whilst the policy is in place.

Tell me more about the limits of Professional Indemnity cover…

UK Professional Indemnity will not cover you for claims against you made by the public for injury, for example. To be protected in the event of these kinds of claims, your business will need to take out Public Liability Insurance.

Your Professional Indemnity policy will also not cover you for any claims made by anyone you employ. That would be covered by your Employer’s Liability Insurance – which is a legal requirement for all UK businesses.

Finally, cover is only provided for claims and work that take place while your policy is active. This is quite important. It means that you should take out your Professional Indemnity Insurance as soon as you start providing services, so that, should there be an issue, you will have had an active policy in place when the work that is being questioned was taking place. It also means that, if you stop work or take a career break, or change professions, you will want to consider continuing your policy for a while.

Don’t let your Professional Indemnity Insurance cover expire.

Here’s an example. A business consultant works with a client. All the time she is doing the work, she has Professional Indemnity Insurance in place. Then she decides to stop her consultancy work. Two months later, that client finds a problem with the work she did and believes it lost them money. The old client makes a legal claim against her. One of two things can happen next:

• If she has not kept her insurance, all the legal costs and any awarded damages will have to be paid out of her pocket.
• If she still has Professional Indemnity Insurance in place, that will cover the costs.

Does that mean I have to have Professional Indemnity Insurance forever?

No. That would be annoying. You want to arrange your cover so that it lasts as long as you are working and then keep it active for a period after that, to guarantee that you are covered for any claims that arise from previous work. In the UK today the usual limitation for a client to make a professional negligence case is six years. So, as an example, you might want to keep a level of Professional Indemnity Insurance for six years after your last piece of work. This kind of Professional Indemnity Insurance is often referred to as a run-off policy.