No matter how safely your business operates, unfortunately, it can't possibly prevent all incidents. One of the most common threats to businesses is claims from the public related to accidents, injuries, and personal property damage. Fortunately, you can protect your business against losses from lawsuits related to these incidents with public liability insurance.
A local independent insurance agent can help your business get equipped with the right public liability insurance. They'll get you matched to the ideal amount of coverage for your unique company's risks and exposures. But until then, here's a deep dive into public liability insurance, including what it covers and when it's necessary.
Key Takeaways - Public Liability Insurance
- Public liability insurance is an older, often outdated form of general liability insurance, which covers third-party claims of bodily injuries and personal property damage.
- In many cases today, public liability coverage is included in a general liability insurance policy.
- Public liability or general liability insurance can pay for the cost of your business's legal defense in a lawsuit for a covered claim.
- Many businesses pay an average of $42 per month or about $504 per year for general liability insurance.
- Working together with an independent insurance agent is highly recommended, since they can tailor policies to fit your unique business's industry and needs.
What Is Public Liability Insurance?
Public liability insurance is an older, and many times outdated, form of general liability insurance. This coverage is part of a larger business insurance policy that protects against claims made by the general public related to accidents, bodily injuries, and personal property damage. Public liability coverage can be applied to claims made against your business by customers, delivery workers, visitors, and other members of the general public.
However, a general liability insurance policy offers similar but broader coverage for businesses today. In fact, most insurance companies suggest businesses choose general liability insurance instead of public liability insurance coverage when building their policies.
What Does Public Liability Insurance Cover?
Public liability insurance is designed to protect your business against costs associated with lawsuits filed against it by the general public. These claims can be related to the following:
- Third-party accidents
- Third-party bodily injuries
- Third-party personal property damage
- Legal expenses and defense costs
Any of these incidents can occur on your business's premises or somewhere else if the harm is caused by your company, its workers, or its operations in some way. Public liability insurance can cover the cost of your legal defense in a lawsuit, including attorney, court, and settlement or judgment expenses. It can also cover medical expenses for injured third parties or pay to repair or replace damaged or destroyed personal property.
When Public Liability Coverage Is Necessary
Liability coverage is critical for protecting your business against costly lawsuits, regardless of your industry. A small business might choose public liability insurance because it's one of the most affordable and basic types of liability coverage available.
However, general liability insurance provides all the coverage included in public liability insurance and protects your business on a broader and more comprehensive level. That's why most businesses today, especially larger businesses, are advised to get general liability insurance instead of public liability policy coverage.
Who Needs Public Liability Insurance?
Public liability coverage is needed by many types of companies and professionals, such as most businesses, contractors, and event organizers. You might need this coverage if you fall into any of the following categories:
- Small business owners
- Freelancers and sole traders
- Contractors and tradespeople
- Event organizers
- Venue owners
If you've been asking, "Do I need public liability insurance?" an independent insurance agent can help you evaluate your coverage needs for your company or trade. Your agent can help you find the right public liability insurance for a small business, public liability insurance for contractors, or any other type of policy you need.
What's Not Covered by Public Liability Insurance?
There are a few types of incidents that public liability insurance does not cover, such as intentional damage to third-party property. It's important to review the exclusions in your public liability insurance policy before ever filing a claim. Common coverage exclusions are as follows:
- Employee injuries (which fall under workers' compensation insurance)
- Professional negligence, errors, and omissions (which fall under professional liability insurance)
- Intentional harm or damage to others
An independent insurance agent can help you review your specific public liability insurance policy's coverage exclusions.
How Much Does Public Liability Insurance Cost?
The average cost of general liability insurance, which includes public liability insurance, is $42 per month or about $504 per year. However, the cost of public liability insurance can vary widely depending on the type of business you run and many other factors. These often include the following:
- Business industry
- Business location
- Business size
- Operations and exposures
- Number of employees
- Annual revenue
- Prior claims history
If you've been wondering, "How much is public liability insurance?" an independent insurance agent can provide you with several quotes and help you find affordable public liability insurance near you.
What Other Types of Business Insurance Are Recommended?
It's often necessary for businesses to have protection for their property, employees, vehicles, and more. The larger your business and the scope of its operations, the more types of coverage it's likely to need. Here are some of the most common types of business insurance to consider adding to your policy:
- Commercial property insurance: This can reimburse you for repairs or replacements of lost, stolen, damaged, or destroyed company property like equipment, buildings, and inventory.
- Workers' compensation insurance: This can cover medical bills and partial wage replacement for workers who get injured or ill due to their job or work environment.
- Commercial auto insurance: This can cover costs associated with accidents, lawsuits, theft, and other incidents involving company vehicles.
- Cyber liability insurance: This can cover costs associated with data breaches and cyberattacks that may expose, sell, or distribute private or sensitive data your business holds, such as customer credit card numbers.
- Business interruption insurance: This can continue paying necessary ongoing expenses and compensate for lost business income during temporary shutdowns due to covered causes like fire damage.
- Business owners policy (BOP) insurance: This convenient package of policies provides small businesses with the commercial property coverage, liability coverage, and loss of income coverage they need.
Work together with a local independent insurance agent to get your business set up with all the kinds of coverage it needs.
How to Choose the Right Public Liability Insurance Policy
When choosing your public liability insurance coverage, it's helpful to start by assessing your business's needs. An independent insurance agent can help you determine exactly how much coverage is necessary for your unique business, given its industry, operations, and risk level.
Your agent can also help you compare quotes and policy options from several public liability insurance providers in your area. All together, they'll help you get equipped with the best public liability insurance policy.
Public Liability Insurance vs. Other Types of Business Insurance
When considering why your business needs public liability insurance, it's helpful to compare this coverage to other commonly needed forms of business insurance.
Public liability vs. general liability
Public liability insurance is usually included in general liability insurance policies today. Buying a public liability insurance policy can provide a cheaper alternative in some cases, but it typically comes with less coverage than general liability. Further, in many cases, public liability insurance is now simply sold as general liability insurance.
Public liability vs. professional indemnity
Professional indemnity is another name for professional liability or errors and omissions insurance, which covers third-party claims of professional errors, negligence, mistakes, and oversights by a business. While a professional liability policy could cover a customer's claim that your business's services caused them a financial loss, injury, or another type of harm, a public liability policy could cover the cost of a customer's slip-and-fall injury on your business premises. Both policies could cover the resulting damages to the third party and your business's legal defense in a lawsuit.
Public liability vs. employer's liability
Employer's liability insurance is designed to protect businesses against the cost of employee lawsuits for work-related injuries or illnesses that aren't covered by workers' comp. Public liability insurance won't cover employee injuries or illnesses, regardless of the cause. Instead, public liability insurance can cover third-party injuries caused at or by your business, such as to customers or delivery workers.
Here's How an Independent Insurance Agent Can Help
When it's time to cover your business with the right public liability or general liability policy, no one's better equipped to help than a local independent insurance agent. These agents have access to several different business liability insurance companies, so they're free to shop and compare policy options and quotes for you to find the best deal. And down the road, your agent can help you file business insurance claims or update your coverage when necessary.
FAQs About Public Liability Insurance
Is public liability insurance the same as general liability insurance?
Public liability insurance is a somewhat dated form of general liability insurance and provides similar coverage. General liability insurance also covers third-party claims against your business for personal property damage or bodily injuries, but on a broader scale. Unless you have a very small business, you might want to get general liability insurance instead of public liability coverage.
Is public liability insurance required?
Though not typically required by law, public liability insurance or general liability insurance may be required in certain instances. For example, certain clients may request a proof of liability insurance certificate from your business before they agree to work with you.
Does my business need public liability insurance?
Typically, all businesses need some form of liability protection. However, most businesses would benefit more greatly from a general liability insurance policy rather than public liability insurance unless your company and budget are very small.
Why work with an independent insurance agent when shopping for public liability insurance?
Independent insurance agents can help you get your business set up with the right kind of liability coverage. They're free to shop and compare policies and rates from many different carriers in your area. And down the road, your agent can help you file business insurance claims and update your policy as necessary.
How much public liability insurance do I need?
The answer to this question can depend on your business's industry, size, operations, and other factors. An independent insurance agent can help you evaluate your unique business's coverage needs to find the right policy.
Does public liability insurance cover my employees?
No, public liability insurance doesn't cover employee injuries or property damage. This coverage can protect against third-party claims of injuries and property damage, such as those filed by customers, delivery workers, or guests to your business.
Can I get short-term public liability insurance for an event?
Yes, short-term public liability insurance for events is available. Your independent insurance agent can help you find the right event insurance policy that includes all the protection you need.
How quickly can I get covered?
An independent insurance agent can help you get set up with a public liability or general liability policy today.
Does public liability insurance cover legal costs?
Yes, public liability insurance can cover legal and defense costs if your business is sued for a related claim.
Sources
https://www.thehartford.com/general-liability-insurance/public-liability-insurance
https://www.insureon.com/small-business-insurance/general-liability/public-liability
