Commercial Insurance – the basics: Public Liability

Public Liability is one of the most basic liability covers available to organisations. This type of cover provides you with a promise to cover the costs of any claim brought by a third party against you for property damage or personal injury which were the result of your negligence.  This is the classic scenario of someone tripping over cables you have left out and unsecured, or a roof tile dropping on someone’s head, and so on.  Costs of a claim include the damages awarded by a court as well as defence and investigation costs. Often claims don’t reach the courts and so this also covers settlements arrange out of court between the two parties.

Public Liability insurance isn’t a legal requirement for most organisations, but it is a sensible purchase, and can often be arranged alongside other covers (property, money, etc) as part of a package. Whilst we will refer to this type of insurance as Public Liability it is also sometimes referred to as General Liability insurance. Public Liability policies often include Products Liability, and can also include abuse cover and even libel and slander in some products. Public Liability insurance is the key type of liability cover that you can buy.

Things you should consider when approaching brokers for a Public Liability insurance quotation include:

  • Contractual Requirements – whilst you are generally free to choose the level of cover that most suits your risk appetite, usually £1M, £2m or £5M, you may have entered into contracts or agreements which require you to have certain limits of indemnity. Common examples of these include charity grant applications, tender processes, commissioned services, etc.  You may also need to evidence that you have appropriate cover in place at the time you submit a grant application or complete a Prequalification Questionnaire for a tender process.
  • Aggregate Limit – whilst Public Liability cover is provided on an “Any one claim” basis, which means the limit of indemnity is per claim, Products Liability often provides a limit of indemnity in the aggregate. This means that the limit of indemnity is an annual limit and so there is potential for the limit to be reached within a policy period.

 

As this cover is usually rated on your turnover, or income. You need to know your estimate for the forthcoming year, and also for the current or most recently completed financial year. It also helps us, as your broker, if you can provide a split in your income, where some money is generated overseas (split by country) or by the provision of different services, especially where some are higher risk.

It also helps if we understand your approach to risk management – do you have a Health & Safety policy? Have you carried out appropriate risk assessments (and is there a paper trail)? Do you have a safeguarding policy, and carry out DBS checks? Having these in place can lower your premium.

Do you buy Public Liability insurance at the moment? If this blog has raised any questions, and you’d like our help to answer them, do get in touch with us.  Likewise, drop us a line if you are thinking of putting some Public Liability insurance in place. We specialise in helping organisations arrange commercial and charity insurance policies.  Finally, for more information about how to buy insurance you can download our buyers’ guide.

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