Public liability insurance is designed to protect businesses from valid or malicious legal claims from the public. The value of coverage is customisable, allowing businesses to tailor the size (and expense) of the insurance policy to their perceived level of risk as an organisation.
But how does a business owner determine the level of risk they face? In this article, we’ll discuss the businesses which tend to use more or less cover, and which businesses occasionally opt to go without public liability insurance altogether.
High Risk businesses
It’s worth beginning any public liability risk assessment by reviewing examples of claims, to help understand the context of what risk factors could contribute to a high incidence of public liability legal issues for businesses.
Claims centre around financial loss, bodily harm or emotional harm sustained by members of the public (whether they are customers or not) who come onto a business property.
Claims are also possible when your employees are working at the property of a customer orget involved in an incident in route to the business activity.
Therefore, you should begin a risk assessment by considering your different business locations, understanding how clients interact with your staff and how long they spend in a location where you carry some responsibility for their safety.
High-risk businesses include those with a high volume of footfall, where customers engage in physical activity that increases their accident risk, or where the environment contains hazards such as staircases,dimly-lit areas, and possibly dangerous equipment.
- Children’s indoor play areas
- Theme parks
- Gyms or swimming pools
- Outdoor adventure centres
- Car washes
- Restaurants that serve allergens in dishes
- Restaurants with interactive elements, e.g., Teppanyaki or Korean BBQ
This question can be asked a simple way – how likely is it that someone will enter my property and injury themselves – whether due to their negligence, my employee’s mistake, or our negligence?
It’s important to not focus on claims where an accident is your fault. Even if an accident is the fault of the member of the public, a claim may still be raised, and some damages could be awarded if you are deemed to have contributed even partially to the incident. You may also choose to settle with a claimant for a small sum to avoid a baseless case going to court. Such is the cost of defending a claim in court, businesses sometimes pragmatically choose this approach under advice from their legal counsel.
Low Risk businesses
Businesses with low risk are those with little physical interaction with the public. These could include mail-order or online retailers who have no physical premises.
- Low-hazard manufacturers who don’t open facilities to members of the public
- 1:1 service provided in a simple setting, such as counselling or
These businesses could be considered low risk, but they are certainly not at zero risk. For this reason, public liability insurance is still suitable and popular among these businesses. Consider the following:
- A trespasser could make their way onto the factory roof and fall through, sustaining injuries.
- A visitor could suffer a heart attack and claim if there was no provision of a defibrillator on-site or if the first aid response was lacking.
Low-risk businesses receive cheaper quotes from insurers because the insurer will assess that it is less likely that the business would need to claim under such a policy. This decides whether to take our public liability insurance policy easier – most businesses opt to take out the policy when in doubt.