For most UK businesses, public liability insuranceis not compulsory, with the exemption of Riding Schools. If you work as a tradesmen, constantly working on site or in someone else’s premises then you may be required to arranged the cover in order to satisfy your main contractor.
If you work alone and you are not working as a sub contractor then you legally don’t need to arrange cover. However, running a business without public liability insurance could be catastrophic and is not recommended.
You’re a professional landscaping company hired by a client. While working on your project, you happen to knock down a portion of a wall. Your client make you responsible for this. Rather than paying the expenses out of your own pockets or from your business coffers, you can rely on your PLI.
Limits of Indemnity
This is the maximum amount that is paid by the insurer in the event of a claim. You may be familiar with the term “sum insured” and this is similar. Under a public liability insurance you are provided with indemnity cover, which means that if a claim is made against you the insurer will seek to make good the loss suffered by the claimant. The limits offered by insurers are normally £1 million, £2 million and £5 million. Some insurers will offer more but this is not the norm.
As a rule of thumb most tradesmen are taking a £2 million limit these days as this is the standard limit offered by the insurers. However, if you are self employed and doing your own work and just need the cover for domestic or small commercial projects then may decide that £1 million is adequate for the risks you face. However, it is the potential to cause life-long injury that will dictate the limit of indemnity you choose, as this where the costs can escalate significantly in the event of a tragic accident.
When arranging public liability insurance be sure to compare quotes from a range of insurance companies. The cheapest policy shouldn’t always be the one to take, make sure you understand the policy exclusions, excesses and the claims procedure before accepting any quote. An insurance policy is only useful when you make a claim, so spending 5-10% more to get a lower excess or cover to work at a greater height may be money well spent.
By Marissa Oldman