Public and Product Liability

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Business owners could face paying exorbitant fees for damages if their Public Liability Insurance policy proves to be insufficient for their needs. You'll find that your insurance policy covers a vast range of situations, but generally speaking, a public liability insurance policy covers your business if someone is injured in some way by your business, or if you damage third party property when carrying out work. Bear in mind that even a minor scratch to personal property could lead to hefty fines, especially as you could be required to pay legal fees if the case goes to court, and these too will be covered by your policy.

Product Liability Insurance covers your business for the harm that your products might do to members of the public. You can still be liable for injury to the public from a product, even if you are a wholesaler and not the producer. If your company is any part of the distribution chain then you have some duty of care for the quality of the product. All that varies is the extent of this liability.

When taking out Public and Product Liability insurance, you need to tell us what type of business you operate. This is not just for the sake of records, but will help us advise you on the type of policy best suited to you - whether your insurer judges cover up to £1 million to be sufficient for your needs or if a larger policy of around £5 million would be more appropriate in the circumstances. If you work in the public sector, for example, you will often be required to take out a minimum of £5 million. Top up insurances are available for those who generally carry a lower limit.

Don't assume you will be safe without public liability insurance just because you run a small business, or because you don't make deliveries. Something as simple as a coffee spill over a client's computer, or a loose nail causing a customer to trip while visiting your office, could cost you thousands if you're uninsured.

Is Public and Product Liability Insurance Required by Law?

There is no legal requirement to buy Public and Product Liability Insurance. Many Local Authorities and other Government like buyers of services have a contractual requirement for their suppliers to have Public Liability Insurance.

Who should buy Public and Product Liability Insurance?

If your business comes into contact with The Public, then it is advisable to buy Public Liability Insurance. This can be anything from The Public visiting your office or factory, to working out in Public spaces. Most Local Authorities require their service providers to buy substantial Public Liability Insurance - up to £10,000,000 in some cases. Local Authorities will want their contractors to have Public Liability Insurance as the Local Authority will have a vicarious liability if anything goes wrong.

Anyone supplying products should consider purchasing Product Liability Insurance. Product Safety Laws require the suppliers to ensure that the products are safe. This is still a requirement even if you did not manufacture the product.

Beware of excluded product types and activities in generic Public and Product Liability Insurance. A general Public Liability Insurance will cover a range of standard activities, but it might not cover specific activities that are viewed by the insurer as risky, such as archery or the use of knives.

Similarly, most Product Liability Insurance might exclude specific higher risk products. Medical devices, aids and equipment is a common exclusion.

All of the items mention can be covered, it is a case of finding a more specialist insurance policy that includes these risks.

How much does Public and Product Liability Insurance cost?

There is a wide range of cost depending on the risk. A generic Public and Product Liability Insurance that is added to a package of insurance for a small business can be around £200. More specific cover for a higher risk category of product like a medical aid is around £3,500. High limits of cover will be more expensive. Some businesses are faced with the challenge that generally £2,000,000 of cover is sufficient, but the firm does some Local Authority work which requires £5,000,000 of cover. In this case it is possible to buy an excess, or top up insurance for the Local Authority work. This can be cost effective.