Public liability insurance is an essential type of insurance for any business because every business comes into contact with members of the public and as such, there is a risk that if a member of the public is injured or has their property damaged, they will claim compensation from you. Freelancers are no different.
It is essential because compensation claims can be expensive to settle. It is also essential because, without it, you would have to deal with a compensation claim yourself, without the assistance of the trained legal team employed by the public liability insurer.
So, what does a freelance insurance policy cover, and what sort of claims can be made against you?
Freelance public liability insurance cover
Public liability insurance covers your legal liability to pay compensation if a member of the public makes a compensation claim against you.
This compensation claim could arise because they allege that something you have done or failed to do has resulted in them being injured. It could also be that their property has been damaged.
As well as paying for the compensation awarded for the claimant’s injury or the cost of replacing or repairing their damaged property, the insurance also covers incidental expenses, such as lost wages or any travel costs that the claimant has incurred. Any legal costs incurred in the handling of the claim are also covered.
Your public liability insurer will have a legally trained team that specialises in handling the complex legal arguments that can be involved in dealing with compensation claims. This means you can get on with running your business without having to worry about dealing with legal issues.
However, although a standard public liability insurance policy will cover your legal liability for some compensation claims, for some professions such as the hair, health, holistic, fitness and beauty sectors, the policy needs to be extended.
The problem for people in the these sectors is that a standard public liability insurance policy excludes claims arising out of professional activities. As such, many of the people in these professions could find that they are uninsured in the event of a claim.
Thankfully, freelance public liability insurance policies for people in these professions can be extended via either a treatment risk extension or via the addition of malpractice cover, depending on the sort of activities and procedures involved.
It is important to make sure that your freelance public liability insurance covers all of your activities fully.
Examples of claims
Many people wonder why the indemnity limit in their public liability insurance policy is £1,000,000 or sometimes even higher. To most people, that’s a huge amount of money. But where compensation claims are involved, it’s not actually as huge as you’d think.
If someone tripped over in a salon and broke their wrist, the claim could easily reach £20,000. But the time that the claimant’s loss of wages, additional expenses and legal fees were factored in, that figure could be considerably higher.
Facial disfigurement caused by a defective procedure wouldn’t be covered by a standard public liability policy, but if there was a treatment risk extension or malpractice cover was included, such a claim could cost £50,000. Again, the claimant’s loss or wages, additional expenses and legal fees would be on top of that. And the court could insist that you paid for the cost of private cosmetic treatment for the claimant.
If there was a serious injury such as spinal damage from which the claimant would never recover, the compensation award could be as much as £250,000. However, in addition to the compensation award, you could also be required to pay for adaptations to their home to accommodate their disability.