If you are in business, whether a supplier, manufacturer or service provider, you will find more and more that you are being requested to prove that you have public liability insurance in force.
This is a form of commercial insurance that provides cover against your legal liability against any injury, illness, disease or damage that you, in the course of your business, may cause to any third party person or property. This can range from someone visiting your business premises and being injured (think of a restaurant insurance policy, where you need cover if someone trips over on your property) to you undertaking work at a third party location and causing damage.
There is no legal responsibility for you to have this cover. Unlike employers liability insurance, where you are legally required to have cover at a minimum limit of indemnity of £5,000,000 or risk a £2,500 fine per day you do not have the cover, the law does not insist on you having public liability.
What you will find though is that companies you work for, may only accept your products or services if you can prove that the cover is in place. We are also seeing more and more local authorities insisting on businesses, such as tanning salons, having this cover in place and being able to provide written proof in the form of a policy and schedule.
The question you will need to ask yourself is what level of cover you need to have in place. Public liability cover is provided in the form of a limit of indemnity, or put another way the maximum amount the insurers will pay in respect of any one loss. Obviously the higher, or bigger, the limit the more expensive the premium. Going back ten years, you could get limits of indemnity that started at £100,000 any one loss. As the cost of claims started to increase, these limits became obsolete. Nowadays, the most basic limit of indemnity you can get cover for is £1,000,000. This can be increased to the more usual £2,000,000. Most insurers will give you cover for limits up to £5,000,000 and you can then buy additional layers of cover up to £10, 15 or even £100,000,000.
You need to speak to your customer, that is asking you to prove the cover, to see what minimum level of cover they will accept. It may be that they simply ask you to prove the cover is in place and it is immaterial what limit you have. In these scenarios, you simply need to decide what level of cover you need in the event of a worse case scenario. As a business insurance broker, we always recommend a minimum limit of £2,00,000 for most businesses.
If you are asked to prove the cover and you have a valid package policy, you will more than likely find that you already have the cover. If not, you need to speak to a broker to get them to provide you with a range of quotations.