By Annaliese Watkins

Public liability insurance provides cover for any awards of damages given to a member of the public because of damage to their property, or an injury to their person that was caused by you or your business. If your usual business activities involve dealing with third parties, it is worth taking the time to consider the many benefits to taking out public liability insurance . For example, if you or your employees go to client premises to conduct work activity, or customers visit your business premises, this cover will provide valuable protection against the cost of an accident.

The protection offered by public liability insurance covers a broad spectrum of potential claims and, whilst it is not a legal requirement, it will prove to be a worthwhile investment should an unfortunate incident occur. Your business will be protected against injury caused to a visitor on your business premises, the injury of one of your employees or a third party whilst working, and any damage caused to property as a result of your business activities.
Whilst the benefits of taking out this cover are plain to see, what are the repercussions of failing to secure public liability insurance? Here, we take a look at what could go wrong if you don’t have the right cover for your business.


Often the absence of public liability insurance could result in losing the custom of potential clients. Some businesses will not deal with companies that are without this type of cover, particularly businesses which are considered to be more at risk, e.g. small to medium enterprises. Whether your business is part of the contruction, consulting or entertainment industry, you could find that valuable work and profit is lost without this important cover. By having comprehensive insurance in place, you are reassuring potential customers that you run a reputable business.

Not only this, but consider the ‘no win-no fee’ encouragement the public are given to pursue claims. Public liability insurance is a small price to pay for financial peace of mind.

Financial ruin

The effects of covering a claim without public liability insurance can be potentially crippling to your company’s finances. Depending on the incident, you may have to pay out thousands, possibly hundreds of thousands, to cover the cost of compensation and legal fees. This amount of money is often unavailable to small businesses, and you may find that you cannot continue trading. Many public liability policies will provide cover for both compensation and legal fees, leaving your bank balance unscathed.

Are you at risk?

Almost all businesses are at risk of being subjected to a claim for damage or injury caused to members of the public. The expense involved with such claims can be devastating to a business that is without public liability insurance. This particular policy can cover a broad range of scenarios and, as such, it can be difficult to provide a concise definition for how public liability insurance can help to protect your livelihood.

Here are just some examples of situations that could result in a claim, a court case or financial loss if you do not have the right cover:

•A person is injured whilst cleaning your business premises

•Someone slips on a wet patch, raised rug or an electrical lead

•As a joiner, you puncture a water pipe and cause damage to a property

•A person sustains an injury whilst handling one of your products

These examples provide a limited overview of the potential risks you and your business may face. The reality is that accidents and mistakes are waiting to happen at every corner, and the risks for businesses are unlimited. Courts are generally unsympathetic to companies that claim the incident was a one-off accident and awards given to the injured party are notoriously high.

What level of cover do you need?

If you are unsure what level of cover you require, seek professional advice. The difference between public liability insurance and other forms of cover can be confusing and your individual requirements will need to be taken into consideration, so it is worth discussing it with a specialist. Not only this, but you don’t want to end up paying over the odds for unnecessary cover, or with a policy that is greatly inadequate.