Do Small Businesses Need Public Liability Insurance?

April 22, 2012

This is a guest post.

Most large businesses do not waver in regards to the decision of obtaining public liability insurance. However, often small businesses simply are not sure if the expense is worth it in the long run, given the scope of their business.

Keep in mind that in the United Kingdom, public liability insurance is not compulsory – with a few minor exceptions. Many small business owners simply feel that they can probably get away without having this type of insurance coverage as part of their business insurance portfolio. However, when making an important decision like this, it is important to consider the ramifications of choosing not to take out a public liability insurance policy such as office insurance. Also, understanding what exactly a public liability insurance policy is can help figure into the decision.
Public liability insurance is insurance designed to protect a business from third party claims that may be made against it. This would include personal injury claims, as well as for property damage. In today’s world given the policies of many personal injury lawyers, many have become more litigious than in the past; they are more apt to file a legal claim in the event they are injured or their property damaged.
Whenever a claim is made against a business, there could be severe financial repercussions. Often monetary damage awards can be quite high. Given the scope of a small business, many small businesses simply cannot weather an incident without the risk of seriously damaging their business. In some situations, bankruptcy may be declared or the business closing up altogether. All of this can be avoided by simply having a public liability insurance policy in place. Therefore, public liability insurance is even more critical for a small business to have than a larger one. Usually a large company could carry on with a claim made against it as it has more capital.

I also blog at A Five Star Life. I write about anything that comes to mind but try to focus on finding the good in daily life.

Leave a Reply