What is the difference between public liability and general liability insurance?
With so many different types of insurance policies out there with similar but slightly different names, it can be difficult to know what insurance policies cover and whether you need it. ‘Public liability’ and ‘general liability’ are two such products you may consider.
What is general liability insurance?
General liability insurance is an American term that is not used much in the UK. Here, it is usually referred to as:
- business liability insurance
- contractors' insurance, or
- public and product liability insurance
If you are looking at an insurance policy with the title ‘general liability’, ‘business liability’ or ‘contractors' insurance, check carefully as to what is included. It may be a bundle of different insurance policies.
Packages could include:
- public and product liability
- insurance for your tools
- employers’ liability insurance
Different insurance companies may include slightly different things or different levels of cover. That’s why it’s always important to confirm what you are getting.
What is public and product liability insurance?
Public liability insurance protects you and your business should something happen that causes damage to a person’s property or causes someone harm.
This relates to something you do which affects members of the public or clients. For example, if a tool fell on a car parked near your work site, or hit a client while they were on site, you would be covered if the car owner or client then successfully sued you.
Product liability insurance is similar, but it protects you in the event a product you sell, supply or install causes injury to someone or damages their property, e.g. a faulty gas boiler.
Do I need public and product liability insurance?
You may need public liability insurance if as part of your work you come into contact with members of the public or clients.
It’s not a legal requirement to have public liability insurance, but many larger clients will insist you have it as a contractual term.
If you are successfully sued and cannot pay the damages and legal fees, your business and assets may be at risk.
You may need product liability insurance if as part of what you do, you import, install, sell or supply any sort of product.