Can you operate a business without public liability insurance?
With so many different types of insurance, it can be tempting to cut corners to keep overheads down. So it is important to know what kinds of insurance products are out there, and which ones are mandatory.
In this video, part of our Public Liability FAQ series, we answer the question ‘Can you operate a business without public liability insurance?’.
What is public liability insurance?
It is a type of insurance that protects you and your business if something your business does causes injury to a member of the public or a client, or causes damage to their property.
Is it a legal requirement to have public liability insurance?
It is not a legal requirement. However, most large clients and public sector organisations will want you to have it as a term of your contract. If you don’t have it, you won’t be able to work with those clients.
You may also find that your trade association requires you to have public liability insurance as a condition of membership. Therefore it can potentially damage your reputation if you don’t have it.
But can I operate without public liability insurance?
You may be able to operate without public liability insurance, but it can be financially devasting if someone makes a successful claim against you and you don’t have cover. Even a small claim may result in an order for you to pay thousands of pounds in damages.
Without insurance, you’ll also have to take time out to deal with and conduct the legal proceedings yourself, or pay to have a solicitor represent you.
If you can’t pay the damages and compensation awarded, your business and assets could be at risk.
Does it make a difference if I am self-employed?
You still need public liability insurance if you’re self-employed. However, as a self-employed person, you carry more personal risk if you can’t pay an order for damages; it is you that will have to pay – not the company.
How do I get cover?
You can normally apply online. The cost to you will be calculated by taking into consideration:
- the sort of work you do
- where you do it
- how many people (if any) you employ
- what level of cover you need.