Do you really need Public Liability Insurance as a Sole Trader?

One of the biggest questions relating to insurance you may have as a sole trader, is whether you really need public liability insurance. How important is it?

Public liability insurance is not a legal requirement, though it is always recommended to any businesses that engages with members of the public, or that carries out any work in clients premises. How much public liability insurance you need is determined by the type of work you provide, protecting you against any financial claims against you by a customer or another third party.

This type of insurance is essential, protecting you against claims from damage caused to third party property or people due to the services you provided and will cover any costs defending the claims in court, should it be taken that far.

Sole Traders and Public Liability Insurance

If you are starting a new business as a sole trader, maybe you have even been trading for a while and want to make sure you are protected, then public liability insurance may be a worthwhile consideration.

This type of insurance provides protection for the business owner, self employed sole traders and freelancers. It provides necessary protection if you are sued by a customer or a member of the public.

It also protects you when you are taken to court, with regards to costs from compensation to legal costs. It protects you financially, in the event that a third party is injured on your property, whether you work from home, an office or a large premises. Remember that someone injured on your premises may use the NHS service, but these medical costs can be claimed back if an accident occurs.

What Public Liability Insurance Does Not Do

There isn't one size fits all when it comes to business insurance and there are times where public liability insurance will not protect you as a sole trader. It does not protect you in the event one of your employees are injured at work, or if you are injured. It also does not waiver the excess, as with most insurance policies. You will need to pay excess in the event of a claim, which can vary depending on the policy you have selected.

Do You Need Insurance as a Sole Trader?

It is important to note that public liability insurance is not a legal requirements and it's entirely your choice on whether to take out a policy or not. In order to decide if you need this type of insurance, take where you carry out your business into consideration, along with whether you have members of the public visibility your premises.

Also take what your customers expect into consideration, as many customers these days expect a business to have a certain level of public liability insurance, giving them peace of mind when working with your brand. Based on the size of your business, you may want to consider that if a customer sues you, do you have the funds to cover the claim.

There are some industries that are expected to have public insurance, these are high risk industries, such as electrical and plumbing companies. You will also want to consider your place of work, if you are a hairdresser working from home, you have customers walking through the door regularly, then having this insurance can give your customers peace of mind and it can protect you financially in the event a customer is injured on your property.

When Could a Claim Be Made?

Let's be honest, as a business owner, you don't want to have to think of a customer or member of the public laying a claim against your business for injury or damaged. It can happen, whether you are a new start up business or you have been operating for a number of years. A claim against your business can be made at any time and can leave you in serious financial distress if you don't have the right policy in place.

Just about any industry is at risk of a public liability claim, from small bakers working from home to plumbers. If your food causes illness, you could find yourself sued by a customer and you will need to cover all medical bills, or the time they had to stay off work, as a result.

As a sole trader, it is definitely worthwhile taking out public liability insurance, for your own peace of mind and to gain trust with current and potential customers moving forward.