Public liability insurance provides cover against claims made by members of the public who have suffered injury or damage to property in connection with the business. If a member of the public is injured on your property you may be held responsible. For example, a customer might slip on a wet shop floor.

Public liability insurance is designed to pay compensation which can include loss of earnings, future loss of earnings and damages awarded to the claimant in addition to your legal cost in defending the claim and the claimants' legal costs that you incur if you are found to be at fault.

Public liability claims can be made as a result of an accident at your business premises or outside of this space - perhaps when you are on a sales visit or working on a construction site, for instance. Some customers or clients may also require you to present proof of public liability insurance before they work with you. This is quite common particularly when working with local authorities, so you need to bear this in mind.

 

• Type of company - is it a limited company, partnership or someone self-employed? How large is the company? This is often revealed by the number of directors, staff and fee income.
• Experience - this is often demonstrated by qualifications. Certain professions have governing bodies with set qualifications (i.e. Surveyors & the RICS, Accountants and the ICA). But experience is also a key factor.
• Type of Business - A full description of the business activities is important, along with any other supporting literature such as brochures or websites. 
• Risk Factors - each profession faces different risks and within each profession that risk will vary depending on the nature of the work being undertaken. Claims - the reaction of an insured to a claim tells an underwriter a lot about a risk. If the claim is valid, is the insured is willing to review their working practices to avoid a repeat.
• Claims often identify if an Insured's working practices are effective or not, for example do they keep orderly documents detailing the project requirements and any changes made during the project?
• Contract Size - it is true to say that the bigger the contract, the bigger the claim. Larger contracts tend to be more complex with more money at stake. 
• Technology - in construction / manufacturing industries underwriters prefer to write risks where tried and tested methods are being used. Those clients involved in "cutting edge" technology have a higher risk as the technology being used is new and no one is yet certain of its capabilities.
• Overseas Exposure – do you undertake work overseas? If so what is that work and on what legal basis was the contract signed.
• Retroactive exposure - PI is written on a claims made basis. A retroactive date is often applied stating the date from which previous work is covered.
• Environmental exposure - certain professions specialise in this area but a number of other professions can easily get involved unknowingly.

This protects you against claims for compensation from employees following injury for which you are legally liable

As an employer, you are responsible for the health and safety of your employees while they are at work. In the event your employees are injured or become ill at work, they may try to claim compensation from you if they believe you are responsible. Employers' liability insurance can help you meet claims that you are legally liable to pay.

The Employers Liability (Compulsory Insurance) Act 1969 (ELCA) makes it compulsory for employers to have employer's liability insurance. You can download a full guide to the ELCA at www.hse.gov.uk/pubns/hse40.pdf.
When you take out or renew a policy you will be issued with a certificate of employers' liability insurance. This will state the minimum level of cover provided and the companies covered by the policy. You need to display a copy of this certificate where all your employees can read it and make it available to be checked by Health and Safety Executive Inspectors or face being fined up to £1000. You also need to retain copies of certificates of insurance for at least 40 years (for policies in force since 1998 or later). This is for your own protection as some diseases can occur many years after the disease is caused.

Many home insurance policies exclude property which is used for business purposes. It is important that your property is insured on the correct basis, which is why Working from Home Insurance is specifically designed for businesses run from homes. The policies include business contents in your home and other essential covers, such as Public and Products liability.