Public Liability Insurance: When you must be more responsible

Public liability arises when a third party is injured on your property. You will then be legally responsible to compensate for the injury caused. Hospital treatments as well as ambulance costs need also to be paid. If you are liable then you also need to pay for the legal costs including that of the one claiming. Liability insurance helps protect your business against all of these costs.

How does liability insurance work?

For liability insurance to work you need to pay a certain amount of premium as charged by your insurer. The premium charged depends on the nature of your business and their assessment of your business sector. If your business poses a small to medium sized risk, your insurer may use book rate or average rate based on similar claims that they may have paid to other businesses. This rate is then used by the insurance company to calculate your premium. To do this they use a factor that reflects the amount of activity in your business. However, for a public and products liability insurance they usually use the turnover record.

If the business is big, the premiums are calculated based on the claims record of the business over a period of a number of years. This may be considered only if the claims history is relatively stable.

Public Liability Insurance

If your business involves people who come and visit your premises or you go to theirs, then you must consider liability insurance.

What does public liability insurance cover?

If you or your business causes any damage or bodily injury to any member of the public, your liability insurance will provide coverage. Any legal fees involved, the cost of hospital treatment will be covered by this policy. The premiums for liability insurance are based on what type of business you have and the level of activity involved in your business.

Public liability insurance has several conditions, exclusions as well as warranties. Hence it is important that you speak to a professional before buying public liability insurance. If you know an insurer and prefer to interact directly with the company, you must make prior checks on the company before buying insurance.

Public liability insurance is not mandatory but if your business involves activities that may pose any risk to you or any third party, it is advised that you get liability insurance. Many a times, your customers may insist that you have liability insurance before they can begin working with you. Business insurance can help protect you and your business from financial damages.