What Is Public Liability Insurance?

What Is Public Liability Insurance?

Running a business comes with many risks, which can potentially impact a company’s ability to earn revenue or lead to its failure. Insurance policies are designed to reduce a company’s exposure to certain risk factors. Business owners are responsible for protecting their employees, customers, suppliers, and any other third party involved in the business. Failure to do so may result in damages, heavy fines, and expensive legal fees, ultimately impacting your business’s bottom line.

That’s where public liability insurance comes in; to provide public liability protection. Learn more about this type of insurance, what it covers, and what it doesn’t.

Do I Need Public Liability Insurance?

Companies take out public liability insurance policies to cover the damage done to a customer, visitor, or member of the public who sustains an injury while on company premises. Public liability coverage can help cover compensation costs and legal fees if any third party involved in the business files a claim against the company for injury or property damage suffered due to alleged negligence.

As a business owner, public liability insurance is designed to protect you from the financial impact of liability claims. Let’s say you run a restaurant business. If a customer falls or trips in your restaurant due to spillage caused by an employee, the customer could bring a liability claim against you.

Remember that you may need to hire an experienced attorney to represent you in the public liability case. Thankfully, liability insurance protects you against financial losses that may arise from such claims. The bottom line is that this insurance is a necessity. Unlike other insurance options, liability insurance pays third parties.

What Does The Insurance Cover?

Finding coverage for your business doesn’t have to be daunting. A good rule is to compare rates offered by different insurance companies. This is especially important to find the best liability insurance policy appropriate for your business. Contrary to popular opinion, public liability insurance is different from general liability coverage. The latter generally covers many potential legal issues for corporate entities. Commercial general liability insurance protects against liabilities arising from workplace accidents, injuries, negligence, and defective products incurred by both members of the public and employees.

On the other hand, public liability insurance typically covers payouts and legal costs if the policyholder is found liable for injuries, damage, and other losses suffered by third parties. This type of insurance also provides cover for employees acting on behalf of the company or business owner and against whom a third party filed a claim. Third parties covered under public liability insurance include visitors to your business premises, customers, and delivery personnel.

What’s Not Included?


Like all insurance options, public liability insurance policies generally have certain exclusions. That’s why it’s important to read the fine print of the policy document before appending your signature on the dotted line. This type of insurance provides limited coverage, given that they only cover liabilities against public claims of workplace accidents, injuries, or negligence. This type of insurance doesn’t cover liabilities arising from the company’s employees, suppliers, or vendors. Business owners are responsible for covering any expenses that aren’t covered under the policy.

Furthermore, liability insurance policies don’t include contractual and intentional damage liabilities. Additionally, this type of insurance doesn’t include criminal acts, even if the policyholder is alleged to be responsible. Also, the insurance doesn’t cover injuries or damages incurred by employees. Workers’ compensation insurance covers claims arising from liabilities suffered by employees. Employees who suffer these liabilities may have to file a worker’s compensation claim to receive compensation.

Lastly, public liability insurance coverage doesn’t include punitive damages, product recall, or liabilities resulting from a professional service rendered to a customer.