What is Public Liability Insurance?
Having been in this industry for over 40 years, we understand the risks you face, whether you are a small newsagent or a global manufacturer, the risks are relatively similar from an insurance perspective.
Public liability insurance is about the people who are not employed by your business, and covers your legal liability to compensate third parties for personal injury, loss of or damage to property, e.g. a punter slips on the floor of your shop.
Primarily, the policy covers risks relating to the premises and activities of the business. Unlike Employers Liability, this type of cover is not compulsory but is highly advised and is often a pre-requisite in trading with other organisations.
Limit of Indemnity
This is normally expressed as an amount for any one occurrence but unlimited in any one period of insurance. The limit of indemnity would be inclusive of claimant’s The limit of indemnity would be inclusive of claimants costs (incurred with insurers consent) and legal expenses.
Great Britain, Northern Ireland, the Channel Islands, the Isle of Man. Non–manual workers are covered for offshore installations in territorial waters around Great Britain and its continental shelf. Cover is also provided for elsewhere in the world for non-manual activities whilst the employee is on a temporary visit or journey. Insurers may insist upon a UK jurisdiction clause in these circumstances and any action be brought in the UK.
The business description should fully describe all the activities. Any changes in the risk must be notified immediately. Ensure that the limits of indemnity are adequate. Any significant increases in turnover or wage roll must be reported to insurers. Some policies work on a ‘head count’ basis and limit the number of employees/operatives covered. Make sure this is accurate and constantly updated.
All claims or potential claims must be reported immediately. You should never admit liability or attempt to deal with any third party without your insurers consent.
Frequently Asked Questions
Is Public Liability insurance required by the law?
No, but it is strongly advised to have in place. Public Liability insurance isn’t required by law in Great Britain, Northern Ireland the Channel Isles or the Isle of Man – other than in some rare circumstances. When it comes to trade business insurance, the only insurance that is required by law is Employers’ Liability insurance (if you have employees).
If you run a business where the actions of you, your employees or sub-contractors could cause damage or injury to people or property, then Public Liability insurance should be at the top of your list of priorities to get.
What level of Public Liability insurance should I buy?
The precise amount of cover that you should buy will be determined by your specific circumstances, and the insurances needs of businesses vary from one to the next. Let’s take it step by step.
- Firstly, some contracts require you to have Public Liability insurance, and may stipulate a minimum level. You should check any paperwork before undertaking a contract, to be sure that you have the minimum required.
- Secondly, certain employers, such as local and central government can have minimum levels of cover that they require of contractors and sub-contractors, so you should check this out.
- Thirdly, some trade associations and bodies require that their members have public liability, and that this is held to a certain level. If you’re a member of a trade association, you should consider checking to see if any requirements are stipulated.
- Finally, you need to consider the nature of your business, what it does, where it operates and how many employees and trainees it has. Each of these factors has an impact on how likely it is that things go wrong, and that you could be sued.
What business types do you insure?
Our policy for tradespeople covers a range of business types including Sole Traders, Partnerships, Limited Liability Partnerships and Limited Companies.
What is a bona-fide sub-contractor?
Providing an exact definition for a bona sub-contractor is not straightforward, but if you can answer “yes” to most of these questions, the worker is probably a bona fide sub-contractor:
- Do they agree to do the job for a fixed price, regardless of how long the job may take?
- Do they supply the materials at their own cost?
- Do they hold their own public liability insurance?
- Can they hire someone to do the work, or engage helpers at their own expense?
- Within an overall deadline, can they decide what work to do, and how and when to do the work?
Looking at the questions above, to some extent, it boils down to the level of decision making and autonomy that the worker has. Bona-fide sub-contractors are generally deemed to be contractors who work without direction from the Insured, hold their own insurance and usually provide their own materials and tools.
Will I be covered instantly?
If you are able to provide us with all the necessary information and provide payment for your policy you will be instantly covered and full documentation will be dispatched immediately. You will not be covered if you have only obtained a quote from us.
Will I be covered if I have to work outside the UK?
This depends on the type of insurance policy you have. Please read your policy geographical limits or call us to confirm.
Do your business insurance policies include terrorism cover?
We can extend the cover to include cover against Terrorism if required. UK Insurers exclude Terrorism from the policy cover then buy it back from a specialist Terrorism reinsurance market on your behalf only if required. You can check out our terrorism page for more about what's included.
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Below are the most common policy conditions you will find on a Public Liability Insurance Policy, which if not paid attention to could result in a disputed or rejected claim.
Wordings vary, some require the insured to take reasonable care to prevent accidents and to comply with statutory and local authority requirements. Others require care in the selection of competent employees and remedial and precautionary steps in relation to discovered defects and dangers.
Non-admission of Liability and Procedure
Failure to comply is a breach of a condition precedent to liability. Your insurers reserve the right to full conduct and control of the claim. You must assist as required.
Liability policies require that Insurers are notified immediately or as soon as reasonably possible to ensure indemnity is secured. Failure to comply may result in the claim being disputed.
Discharge of Liability
If a claim is likely to exceed the indemnity limit, the insurer may choose to pay the limit and costs incurred and relinquish all further liability.
Trade Specific Conditions
Businesses involved in working at or with height, depth, heat, manual ‘work away’ will have specific restrictive conditions applying to their policies which must be studied, understood and adhered to, otherwise indemnity may not apply.
Below is a list of the common extensions you would find in a public liability policy. Your policy may also contain additional extensions in respect to false arrest, discrimination, accidental obstruction, car parks, cloakrooms, and a limited ‘products’ cover in respect of food or drink served to employees, partners etc.
Libel and Slander
The insured is indemnified in respect of liability for claims made during the period of insurance due to acts of libel or slander.
Data Protection Act
Provided the insured is registered under the act, liability is extended to include compensation for damages, distress and defence costs in respect of prosecutions under the act.
This extension, when added, brings financial loss under the policy. Cover is on a claims made basis and within the existing liability limit. This is useful for security companies where negligence can have a wide impact beyond the incident.
Third Party Working Risk
Owners hiring out plant may also need this extension to safeguard themselves against failure of cover on policies effected by the hirer.
Motor Vehicle Contingent Liability
Vehicles not owned or provided by the insured, may be used on the insured’s business. In the event that the primary policy (that of the employee) fails, indemnity is provided to the insured.
*Please note that we cannot insure taxi drivers or third party delivery drivers (e.g. deliveroo or uber eats). This is only covered when you own the business and have delivery drivers that you employ.
An extension sometimes available where an Insurer may be notified of a claim that predates inception.
Legal Defence Costs
Cover is provided for legal defence costs in relation to criminal proceedings under the Health & Safety at Work Act. Fines, deliberate acts or omissions are not covered. Separately, company directors and officers should consider the purchase of Directors and Officers insurance as individuals as the company policy does not protect them. See our Directors and Officers page for more information.
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Making the small print...BIG
A Fair Presentation of the Risk
At the heart of insurance contracts is an obvious truth: you have an enormous advantage over the insurer. You know all about your business, its history, processes, people and management, but the insurer knows nothing – other than what you tell them.
You have a statutory duty to make a fair presentation of the risk. You must tell the insurer:
• Every material circumstance which you know or ought to know and/or
• Sufficient information that would cause the insurer to make further enquiries, if neccessary, to review those material circumstances
• You are deemed to have the knowledge of the company’s senior management.
• You are deemed to have the knowledge of the person arranging the insurance (who is deemed to be a senior manager under statute).
• Anything that can be discovered by a reasonable search.
A failure to make a fair presentation of the risk gives the insurer various remedies, depending upon the nature of the failure, from avoiding the contract and not paying claims to modifying the basis of settlement.
Examples of Misrepresentation
It is often easier to demonstrate the consequences of risk presentation failure by example rather than theory. Here are some real life examples of typically forgotten or unrevealed material facts which later caused huge problems and repudiated claims:
A reprocessing plant did not reveal a series of small fires during their insurance year.
Following repeated false alarms, a retailer didn’t reveal that Police Response had been withdrawn.
A restaurant omitted to reveal repeated minor floods from an upstairs nightclub.
A construction company didn’t reveal potential employee claims recorded in their accident book.
A company failed to reveal written warnings to an employee over repeated dangerous driving.
A company failed to reveal that it had been ‘struck off’ by Companies House and was trading as a new legal entity under a different designation.
Compiling the Risk Presentation: an ongoing process
The compilation of risk information for presentation to an insurer might be thought to be simply contained in a proposal or risk presentation form, however, such forms are not exhaustive and cannot take account of circumstances which change beyond their
compilation. Moreover, merely referring insurers to your website or dumping data is not making a fair presentation of the risk. ’Fairness’ is a subjective test but it would certainly involve simplicity, clarity and relevant selection.
Ongoing communication is vital, because the duty to disclose material circumstances is ongoing throughout the insurance year and at renewal of the insurances.
It is not possible to overstate the importance of researched, adequate risk presentation – there have been countless legal disputes, repudiated claims, ruined businesses and lives arising from the simple failure to reveal all the facts to an insurer. A failure to present risk adequately is a bigger risk than the risk you present.
It doesn’t matter that the failure is innocent, something overlooked, forgotten or discounted as unimportant – it might be important to the insurer, in which case it must be revealed.
Should there be anything not yet disclosed, or that you are unsure would influence your insurers about this insurance tell your broker/insurer immediately.
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Working With Us
The Business Insurance Bureau conducts both client and market research to identify solutions to the needs of an almost exclusively business clientele. We will make a recommendation once we have assessed your demands and needs.
All premiums due to insurers must normally be paid by you on or before the date that cover commences. Where alternative methods of payment are available these will be discussed with you so that arrangements can be put in place by the due date.
We are registered with the Data Protection Registrar. We will ensure that any information obtained from you is treated by us and anyone else involved in arranging, considering to arrange or managing your insurance, as Strictly Private and Confidential. We will not provide your information to anyone else unless we:
have your permission to do so, or -are required to by the FCA, or -are required to do so by law, or -are required to do so in the normal course of arranging or negotiating and maintaining, or renewing financial services products which we may from time to time approve.We take appropriate steps to ensure the security of any money, documents, other property or information handled or held on your behalf.
All information in any form, with the exception of policy documents and certificates issued on behalf of insurers and supplied by us, to you, should be treated as Strictly Private and Confidential and not be released directly or indirectly to any other party, without our explicit consent.
Note: in transacting your insurances with The Business Insurance Bureau, you are deemed to have accepted our Terms of Business. Your accepting of these Terms of Business does not affect your statutory rights.
You must notify us as soon as possible of a claim and circumstances which may give rise to a claim. In the event of a claim you should contact this office and we will promptly advise you and if appropriate, issue you with a claim form and pass all details to your insurer. You should not admit liability or agree to any course of action, other than emergency measures carried out to minimise the loss, until you have an agreement from your insurer. We will remit claims payments to you as soon as possible after they have been received on your behalf. In the event that an insurer becomes insolvent or delays making settlement we do not accept liability for any unpaid amounts.
You would have the right to cancel a policy within 14 days of its inception or upon receipt of the policy documentation whichever is the later. You would as a Consumer and without providing a reason, cancel the policy by confirming this is in writing to the address of our office through which your policy was placed. Any policy documentation and in particular any legal document, i.e. Certificate of Motor Insurance, Employers Liability Certificate, MUST be returned with your instruction to cancel. By exercising your right to cancel the policy, you are withdrawing from the contract of insurance.
Our services may be terminated without cause or penalty by giving one months’ notice in writing. In the event that our services are terminated by you other than at the expiry of the policy we will be entitled to retain any fees and all of the brokerage payable. The responsibility for handling claims reported after the date of termination shall in the absence of an express agreement be the responsibility of the party taking over the role.
“When we were purchasing the distillery, we required to purchase some specialist insurances. We were stuck in a room with seven experts from a multinational insurance broking firm who told us we would never be able to purchase the cover we needed. I think, that it was a similarly rare, quality independent firm, The Business Insurance Bureau, that managed to unlock the door to the insurance we needed – and we’ve never looked back.”
Shish Mahal Restaurant
Asif Ali, COO
“We had a fire a few years ago that started in the flat above our restaurant. Bob was on site within the hour, armed with a loss adjuster. Work started immediately and incredibly, we were up and trading within 5 days! It was a truly impressive turnaround, professionally handled. They also do great work on risk managing the kitchen, which is invaluable after our fire experience.”
Barrowland Ballroom, Glasgow
“We were about to give up concerts altogether when, we were introduced to Bob Hannah. He commissioned an independent structural/fire survey which showed the ballroom to be a much better risk than had previously been believed. As a result we ended up with our insurance position renegotiated to an acceptable level. There is no doubt this little touch of ingenuity has turned out to be a major factor.”