A Complete Guide to Limited Company Public Liability Insurance

Limited company public liability insurance is a must-have especially for people who own limited liability companies. This type of insurance, apart from protecting you, also protects your business from any claims resulting from accidental damage that may be caused by the property of third party or injury or death whilst within your premises.

How it works

We will use an example to explain how public liability insurance may help your limited liability business. Imagine that are the owner of a company and one of your employees pugs a vacuum cleaner and run the capable through the floor and to one end of the carpet. A client walks in, trips and falls because of the cable and ends up breaking their ankle. Under such circumstances, the customer is justified to seek legal recourse by suing the company because their accident resulted from the direct activities of your company. It is negligence on the part of the employee.

But in case you happen to have public liability insurance for limited liability companies at the time of the incident, any legal fees, compensation payments from the claim and NHS medical costs would all be met by the insurance company. In the absence of this cover, however, your company would be expected to settle the claim, the medical costs as well as any legal fees incurred. This might run into tens of thousands of pounds, which can cause a disastrous effect on the company fortunes.

Limited company public liability insurance

How much insurance do you need?

The above example is a basic one to illustrate the way public liability insurance works. You will need to think about the amount of cover that you will need. The majority of insurance companies provide cover from £1million. But if your business operates in an industry that has high risks, you will definitely require more cover. The cover for SMEs (small to medium enterprises) is capped at £10million. It is important to carefully consider your limit to avoid being under-insured.

Who is public liability insurance for?

If you run a limited liability company that deals with lots of visiting people like clients and suppliers, you will need this kind of insurance. Also, if your business involves working at the home of your clients, you will be held liable for any injury or damage resulting from your working for them.

In most cases, no one asks for accidents to happen. All of us wish that accidents didn’t happen at all but despite our best intentions, we still end up with them. This is why it is very important that you take adequate cover to protect you from compensations payments and other expenses. Many companies find it challenging to foot costly legal expenses and compensation payments that arise from damage or accident to their customer’s property. Therefore, carrying liability insurance can save a business from extinction.

How do I select the right policy?

When in the process of comparing pubic liability cover quotes, consider the risks that your business is exposed to. In general, if you have a business that is frequented by a large number of third party individuals i.e. the public, then you will need a level of cover that is higher. These include pubs, theaters, clubs, and shops among others. Others include companies that work with powerful machinery and chemicals or businesses where there is consumption of alcohol. But if your clients only visit you infrequently, you can be good with considerably lower limited company public liability insurance cover.

liability insurance for your business