Public liability insurance for home businesses

Today MoneySupermarket.com continue their occasional series with a post on public liability insurance:

However successful a home business, there’s always that worry at the back of your mind that something could go wrong. Public liability insurance can help mitigate that worry.

If you use your home as your business premises, you’ll most probably be aware that you are legally liable for any accident that could befall a client or customer whilst on your property.

Chances are, you probably have a business insurance policy in place, but does it cover you for public liability and if so, are you insured for a high enough value?

Let’s take a look at exactly what public liability insurance covers:

The average policy will pay out if a 3rd party, such as a client or customer, has an accident whilst on your property and will cover the cost of a resultant claim and legal expenses if this falls within the cover value of your policy.

It is interesting to point out that your policy will also cover you for damage or loss to a 3rd parties property as a result of an accident. This could be something as simple as a claim for loss of personal computer equipment or a damaged vehicle.

If your trade requires you to visit clients’ homes and carry out work, then the average policy will also cover you for damage you might cause to their property, or, damage caused at a future point as a result of the work you carried out.

In terms of cover levels, the minimum you can usually take out is £1 million, but depending on the nature of your business, you may want to opt for a higher value (usually up to a maximum value of around £10 million). Some contracts – particularly if you are working with a local council – will specify a minimum cover level you need to have in place.

When selecting a policy, you should pay close attention to the excesses you will have to pay out to facilitate a claim; cheaper policies tend to have higher excesses so may end up costing more in the long run.

It is also crucial you examine the exclusions to ensure that your particular line of work is fully covered. Common exclusions are as follows: damage or loss of the insured parties’ property (only 3rd parties are covered), defective workmanship, deliberate acts, damage to a 3rd parties property as a result of advice given by you (this may be covered under the professional indemnity section of your policy if you opt for this additional cover). Exclusions will vary from insurer to insurer so it is vital you check this information before purchasing a policy.