What Does Public Liability Insurance Cover?

July 24, 2020


RHI Agency Team

What Does Public Liability Insurance Cover?

Public liability insurance covers your business when a supplier, client, or member of the public, gets injured or sustains property damage on your business premises. The claim can arise due to an accident or as a direct result of negligent business operations. Say, for example, one of your customers trips on a loose carpet, gets injured and demands that you pay for the medical expenses. Or your employee scrapes somebody’s car while making a delivery, and the car owner sues you for damages.

 Unless you have public liability coverage, such unexpected expenses can create a financial imbalance, especially when you are running a small business.  Public Liability insurance covers the cost for a personal injury, loss or damage to the property, and death. You will get covered for incidents that happen on the business premises, event, or out of any activity organized by your company.

Do I Need Public Liability Insurance? 

Whether you need public liability insurance, depends upon the nature and location of your business. If your business deals directly with clients, agents, customers, or members of the public, it is recommended to insure yourself from any unanticipated claims arising out of unexpected and unfortunate events. In the US, there is no legal compulsion to go for the liability insurance cover. It does not overpower the fact that having public liability insurance comes with its merit.

Let us be honest here. No business can afford a fall out with the most significant clients over one unfortunate accident, or a customer who fractured the wrist after tumbling on a slippery floor. In some cases, a client, a professional body, or an industry regulator might insist you go for standalone public liability insurance. You have all the sound reasons to go for it.

  • Public liability insurance protects your business when someone gets physically injured on your office premises.
  • A contractor public liability insurance covers the damages of the customer’s property, which can accidentally happen while you are working at the customer’s premises. 
  • If your business involves deliveries, public liability insurance can cover accidental car damages during any of the delivery attempts.
  • Even when you are working from home, you will need public liability insurance in case someone is injured on your premises when they come to consult you for any professional advice.
  • Minor injuries or car damages can result in hefty costs, and you will need public liability coverage to protect you from such unplanned expenses.

What Does Public Liability Insurance Cover?

In general, any adverse and unforeseen incident occurring in the company premises, capable of creating a problem in your business, can be covered with public liability insurance. Most claims stemming from Public liability are barely predictable, and in several cases, not even linked with business operations. You can get Public liability insurance to help you take care of:

  • Claims arising out of any accident, injury, and damage on your business property or out of events connected to your business.
  • Legal Liability
  • Transportation hazards
  • Act of God events
  • Pollution and contamination.

How Does Public Liability Insurance Protect Your Customers?

Whatever business you are in, if any customer or a visitor gets injured or has his/her possessions damaged due to any of your business operations, you need to be sure that you can compensate them. As a business owner, ensuring the safety of all the stakeholders, including the members of the public, is your prime obligation. While you should always start with risk assessments and safety checks, being prepared for every contingency hurts nobody. Choosing the right public liability insurance helps you take care of them later.

To help you get a best-suited policy, you need to understand that the law classifies your business visitors into these categories.


The members of the public invited to engage in direct interaction with your business are the invitees. You could send out invitations using signage or advertisements. Also, your business partners and contractors come into this category. It is your responsibility to ensure a safe environment for whosoever comes to interact regarding your business. Your public liability insurance will cover claims related to the business invitees.


Licensees do have permission to be on your business premises, but you have not invited them. We are talking about door-to-door sales personnel who are looking forward to doing business with you. Business premises with open doors such as a factory attracts this category of visitors. Public liability insurance appropriately covers this category.

The Difference Between Public Liability Policy And Other Policies?

A Public Liability policy is vital for small business owners and prominent entrepreneurs. Depending upon the kind of business, you might need to look for an umbrella of insurance policies. Many policies offer a specific degree of coverage. While they might sound alike, they all cater to different domains.

Property/Equipment Insurance

Property insurance and public liability insurances are different. The general liability insurance covers the damage caused to others but does not insure your property. Property insurance pays for the damage to your business premises or the equipment such as computers, furniture, etc.

Product Liability Insurance

If anyone sues you for any damage or injury resulting from your product, you will need this insurance to cover your legal costs. If you are a manufacturer or a retailer, product liability insurance is a must-have.

Professional Liability Insurance

If a customer sues you for a job that you have done, professional liability insurance can pay for your legal costs and the damages arising as a result of a job poorly done. This insurance is also known as professional indemnity insurance.

Workers Compensation

Public liability insurance does not cover any injury to you or your workers or any of their possessions while they are at work. Worker’s compensation does that. If any employee gets injured at work, the policy can cover the due compensation amount. 

How Much Does Public Liability Insurance Cost?

Your public liability insurance cost depends upon the size and type of the business that you run, and the prevalence of public interaction. The insurer will take into account the claims history for your company and the level of risk associated with the industry.


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