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What is Public Liability Insurance for Self-Employed?

What is Public Liability Insurance for Self-Employed?

Self-employed business owners use public liability insurance to protect against third-party claims for injury, damages or loss. According to NimbleFins, public liability for the self-employed is critical for covering costs associated with legal proceedings, settlement payments, and other associated fees arising from these types of claims.

Any incident or accident that occurs during business activities, whether at your premises or a customer’s location, can trigger a claim being made against your company. If found at fault, your business will be responsible for bearing the cost of any successful claim. Expenses can accumulate rapidly for a legal defence cost and can include medical treatment fees and paying financial compensation.

Some of the most common public liability claims are for:

  • Slips, trip, falls
  • Damage or injury from falling objects
  • Damage from unprotected objects to persons or property

To limit exposure to these types of claims, most business owners (whether self-employed or running any other type of company) purchase public liability insurance to protect their business from the financial impact of any claims made against them.

Public liability insurance does not provide any protection for injuries to you as the business owner or employees. Nor will it cover damages to property, possessions or illness caused by working for the company.

Why do you need public liability insurance when self-employed?

The type of business that you operate will determine the need for public liability insurance. For companies that deal with public members, having coverage is advisable to provide adequate financial protection. This also applies whether you are self-employed, a sole trader, or a freelancer.

As a business owner, you can be liable for claims no matter what type of business you operate if negligence is proved. If you are found at fault, you will be responsible for paying sums of money for compensation and medical fee. Or for the repair or replacement of damaged items.

If you have no public liability insurance in place, then the cost of these items will need to be paid from business funds or the owner’s personal accounts.

When do you need public liability insurance if you’re self-employed?

If your business brings you in contact with public members, then public liability insurance should be obtained. You will also need coverage if you visit customer’s homes or business premises to perform work. If damages or accidents occur at a customer’s property, your public liability insurance will cover any incidents that happen during business operations.

Some clients will request that a company has insurance in place before performing work at their location. Similarly, local authorities and government offices will require coverage with specified limit amounts to ensure appropriate protection levels. Companies may receive a request for verification annually, and a certificate of insurance will need to be supplied as proof of insurance.

A public liability policy will protect you from claims if you use your home as a business location or office. If a customer visits you at your property for any reason and suffers an accident, your insurance will protect you from any claim made.

How to get public liability insurance for self-employed

An insurance broker can help you to obtain a suitable public liability insurance policy. They will consider the size of your business and assess risk exposure to determine appropriate coverage amounts. Policies can usually be purchased online, over the phone, or in person.

Average policies range from £1 million to £10 million, so you may only require a lower cover level if your business is small. If work is performed for local authorities or government offices, then the minimum amount of coverage typically required is £5 million.

Obtaining a public liability insurance policy can be done by:

  • Contacting your current insurer
  • Contacting a new insurance broker
  • Shopping insurance companies direct
  • Using a comparison site 

The number of employees does not influence the need to have public liability insurance, the value of assets, or the business’s size. If your company has no interaction with customers or clients, then public liability insurance will not be necessary. However, if you frequently deal with the public, customers, or clients, then a policy is recommended.

Compare public liability insurance for self-employed

Several companies can provide quotes for public liability insurance, with organisations like Axa and Direct Line selling business policies directly. Be careful to check information about exclusions and excesses. It is also prudent to check the hours of operation for claim lines and customer service hours.

Self-employed people can compare public liability quotes from several sources at once through a comparison site. Quotes can be obtained by submitting just one form, and prices from multiple insurance providers can be viewed quickly to assess each policy’s value.

As the insurance market is competitive, monthly premiums can vary substantially between different companies. Using a comparison engine can prevent you from overpaying for your public liability insurance policy.

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