Public liability insurance is one of the types of insurance that all businesses need. Unlike employer’s liability insurance it’s not a legal requirement to have it, but you shouldn’t consider it optional. In fact, if you’re running a salon it might a local authority condition that you have this type of insurance.
This type of insurance covers any compensation claims that are made against you by people who believe that they’ve been injured or that their property has been damaged as a result of something that you’ve done or failed to do. As well as covering any compensation that you have to pay, it also pays:
- Any wages that the claimant has lost as a result of an incident
- Any legal fees incurred as a result of the claim
- Any other associated costs and expenses
Compensation claims are being made more frequently as a result of the proliferation of “no win, no fee” solicitors, and compensation claims can be difficult and expensive to settle.
Even a minor claim can end up costing £1,000 to settle once the legal fees are taken into account. A relatively standard injury such as a broken wrist caused by someone tripping your salon could cost in the region of £20,000. Claims for serious injuries can cost well in excess of £250,000.
Being uninsured in the event of such a claim being made against you would cause problems for your business and could even result in bankruptcy.
Help with defending claims
As well as covering the costs of a compensation claim, your public liability insurer will also have a specialist team of claim handlers that can handle the claim on your behalf.
This means that you won’t need to worry about dealing with solicitors and potentially complicated legal arguments. It also means that if people make claims against you that aren’t valid, you don’t end up paying compensation that you aren’t legally required to pay, keeping your costs down. If you are legally required to pay compensation, your insurer will know the correct level of compensation to offer to the claimant.
Financial loss cover
Standard public liability insurance only covers compensation claims if there has been an injury or property damage. Claims for purely economic losses are not covered.
This is a problem for hair and beauty salons. Not all mistakes result in injuries or property damage. Some could simply result in a model losing money because he or she was unable to earn, or a photographer incurring additional costs.
Financial loss cover extends a standard public liability insurance policy so that it provides cover for compensation claims involving purely economic losses.
Products liability insurance
A public liability insurance policy will cover you if something you have done or failed to do results in a compensation claim being made you. However, it will not cover you if the claim arises as a result of a defect in a product that you have sold or supplied.
Products liability insurance covers this type of claim. This type of insurance is normally included with public liability insurance.
Treatment risk cover
A standard public liability insurance policy won’t cover you if a compensation claim arises as a result of your delivery of professional services. This means that although you’re covered if someone is injured because you’ve failed to warn them that a floor is slippery because it’s just been mopped, you wouldn’t be covered if a claim arose as a result of your provision of hair or beauty services.
Such claims can be expensive to settle. A claim for facial scarring, for instance, can cost more than £50,000 to settle. A treatment risk cover extension added to your public liability insurance means that this sort of compensation claim would be covered so you wouldn’t be uninsured if you found yourself in this situation.