Public liability cover will cover you against claims from third parties for any property damaged during the course of your work.
The ‘official’ definition is: ‘The insurance of liability for accidental bodily injury or damage to the property of third parties.’
Essentially, public liability will cover your company if it causes the injury (or even death) of a third party. You will also be covered if you damage property belonging to a third party, in the course of undertaking your contract duties.
For example, If a client visits your office and trips over some cabling on the way in, or if you damage a server whilst on a client site, public liability insurance will cover such eventualities.
There is no legal requirement for you to take out a public liability policy, but such cover tends not to be expensive and may provide peace of mind, and many clients now insist that you have adequate cover in place before dealing with you.
Most policies will cover the cost of property damage, any compensation claims, and also any legal costs you may incur as a result of third party claims.
It is worth noting that this type of insurance only covers third party claims. If you have any employees, you will need to take out an employers liability policy.
How much cover do I need?
The amount of public liability cover you take out is often related to the type of business you are running.
For most IT contractors, you will typically be quoted for £1m or £2m of cover, although you can obtain quotes for amounts up to £10m.
You will often find insurance providers will offer public liability cover as part of a general business insurance package, which may also contain employers liability cover and even ‘office insurance’.
If you are working via a PAYE umbrella scheme, you will typically be covered by a business insurance policy already, so check with your account manager if you are unsure.