Public Liability Insurance for Community Groups Explained

Running a small community groups comes with an inordinate amount of responsibility. Given the number of activities, gatherings, and events that must be planned, you should be concerned not only about having things run smoothly but also making sure you are protected in case they don’t. Purchasing a public liability insurance policy can give you peace of mind and safeguard your institution from the crippling costs that are associated with a lengthy lawsuit.

What it Covers
Public liability insurance will cover all the cost of injury and hospital treatment should you be found responsible for an accident. This includes claims made by the NHS and the ambulance ride if necessary. The policy will also defray the cost of legal representation, making the insurance company essentially responsible for defending your claim.

For instance, if you were holding a fundraising event and a patron injured themselves while at one of your booths, the public liability policy would cover their treatment and medical bills. If the patron decided you were acting negligently and decided to sue, the lawsuit and any resulting claim would be handled by the insurer. Anything from a slip and fall to food poisoning from a bake sale could result in a lawsuit, and it is important to ensure your community group is covered should something of this nature occur.

In addition, public liability insurance will cover the cost of property damage. If in the earlier example, the patron who slipped and fell did not injure himself, but dropped his computer, they may sue the community group for replacing the cost of his equipment, as well as compensation for any down time created as a result. If the hard drive was damaged and there were sensitive documents contained therein, the cost could be much higher than the price of the laptop.

Types of Community Groups

The amount of your premium will depend mostly on the amount of risk your insurance provider incurs. As different groups represent different levels of risk, many public liability insurers offer various tiers of cover. For smaller groups, there are discounted options available as well if you meet certain criteria. For example, an insurer might provide a lower rate to community groups that have the following:

  • An annual turnover of less than £10,000
  • Less than 100 members
  • All meetings are held in a hired premises
  • There is existing liability coverage for meeting or activity grounds
  • Less than or equal to 6 fund raising events per year
  • Less than or equal to 6 social outings or group events per year.

Coverage Costs

Most insurance schemes offer the choice of two levels of indemnity: £1 million or £5 million. However, for larger groups, an indemnity level of £10 million may be recommended.

It is also important to note that most insurance providers will have exclusions in their contracts. Notably, any event that includes fireworks will likely not be covered by the policy provider due to the standard hazardous materials clause. Be sure to talk to a qualified broker to ensure that all your events, meetings, and activities are covered by the insurance provided.

What Employers Need To Know About Liability Insurance For their Employees

Public liability insurance for employers protects them from liability for accidents and the resulting lawsuits that may be caused by their company’s doing business. Any damage covered by the actions of employees of a business would be covered by this type of insurance.

Companies with employees, especially large numbers of them, need to have a way of making sure that these individuals do not create a situation in which the company becomes involved in legal trouble as a result of their actions. Though a business may do their best to make sure that no such mishaps occur, it can be difficult to be certain what the competence level of every employee is. Public liability insurance gives a measure of security here.

What Does Public Liability Insurance Cover?

Public liability insurance covers a business against harm to individuals or damage to property caused by a business. A business essentially consists of employees involved in various tasks and so this kind of insurance, though it applies to the business as a whole, can be seen as a way of insuring that the negligence or oversight of employees does not get the company into costly legal trouble.

The following are some scenarios in which public liability insurance may become useful or even vital and indispensable:

An employee in a construction crew leaves a heavy box of tools on top of a girder of a construction project during a lunch break. Another employee attempting to climb down off of the girder upsets the box of tools and it falls 25 feet down, striking a pedestrian and putting him into the hospital with major head trauma.

The individual sues the company for negligence – no tools should have been left on the girder during a lunch break. There is virtually no question here that this is the company’s fault. Public liability insurance would pay on the claim and thus avoid a costly law suit that the company would most likely not win.

A movie crew begins filming on location in a busy city street. One of the individuals operating the camera, unbeknownst to the other members of the crew, has significant psychological problems of a psychotic nature. Though seemingly normal enough to begin with, he goes into a psychotic episode while filming and begins throwing items into the street and at passers-by. Something he throws injures a pedestrian. Before anyone knows what to do he throws a movie camera into the street which lands on the windscreen of a passing car, shattering it, and sending the car into a blind swerve. The car swerves onto the pavement and injures still other pedestrians.

In a nightmarish scenario such as this public liability insurance would be even more necessary. The resulting damage would be both to property (the car) and individuals (the injured pedestrians). The important point in this example is that the damage would have been caused by an employee and that this would not have been suspected initially. This illustrates that it is not always possible to know how an employee will react in a certain situation.

Some Things to Keep in Mind Regarding Public Liability Insurance

The company you deal with for public liability insurance will base your rates on a number of different factors. Some of these include the following:

The Nature of the Work your Company is Involved in

Different types of business activity have different levels of risk to the public. So one of the things that your insurance company will probably want to know is not only what type of business your company conducts but specifics about its activity such as how much contact with the public it has, where it is located, the specific risk levels of various different activities and so on.

When the Business Started

The company will want to know when the business began. If it is a public company they will probably ask when public shares began to be traded. This gives them a sense of how much experience the business has with the work it does, which can affect risk level. It also gives them an idea of the financial stability of a company.

Experience

The insurance company may ask about the experience of the owner or various employees. If you are experienced as a business owner and have owner similar businesses before, or perhaps worked for them, you can get a reduced insurance rate because the company reasons that you will probably be less likely to make errors.

Number of Employees

The insurer will want to know the number of employees employed by the business. To some degree more employees means more accident potential, though in some cases the opposite may be true. For instance an understaffed construction crew might be more dangerous than one with an adequate number of workers.

If you are an employer you should definitely consider public liability insurance. It can be a great way to insure that employee error doesn’t cause some kind of disaster to befall to your company’s reputation and finances. This will give your company peace of mind and a sense of confidence in dealing with the sometimes hard to predict nature of life in the modern business world.

How to Find Cheap Public Liability Insurance

Public liability insurance safeguards you in the event of a lawsuit due to death, bodily injury, or property damage to an employee or member of the public. It covers your business for compensatory damages, legal fees, and other expenses related to hospital treatment, coroner’s inquest, or other enquiries made as a result of the accident.

Typical liability insurance will cover you for claims up to £5 million, but can be less than or exceed that figure depending on the type of coverage you opt for. In fact, in certain situations, where a business is responsible for an event that cause damage to multiple individuals or causes significant property damage, the cost of entitlements to the aggrieved can be astronomical. However, while public liability insurance is pretty much mandatory for most businesses, finding an affordable one can difficult. Yet given how difficult it is to keep a new or small business afloat, the need to trim the cost of premiums is as critical as having the protection from a legal claim.

Know Your Risk Profile

The first step to getting cheap public liability insurance is to know what about your business constitutes the most risk. Naturally, the more dangerous your business operations, and the more faulty your equipment, the more likely an insurance company will raise your premium to account for the likelihood of a claim. Some of these areas will simply be an unavoidable aspect of the industry you chose.

However, not all business are the same, and some policies may raise your premium based on the industry you are in even if those risks do not apply to your particular operations. Moreover, there may be some risks you feel must absolutely be covered and those that may not be as applicable to your business. Finding a flexible plan that covers what you need and excludes things you feel are low risk can mitigate the cost of your premium. The following are eight items that an insurer might assess when calculating your premium:

  • Business Type – Your rate will be highly influenced by the claim history of your peers in the industry.
  • Ownership Type – Sole proprietorship, partnerships, or limited liability companies all have different levels of financial risk.
  • Ratio of Annual Sales to Inventory
  • Previous Claims History – Like car insurance, having claims in the past means a higher chance there will be claims in the future as it reflects a pattern of behaviour
  • Location – Commercial businesses may have more consumer traffic, while industrial locations have their own risks, particularly to employees
  • Subsidiary Organizations
  • Number of Employees – Includes clerical employees, partners, and directors
  • Starting Day of the Policy

Comparison Sites

Once you know the risk factors for calculating your premium, you can now begin to shop online to get a quote. Comparison sites are handy in that they perform much of the research for you, by finding and sorting available insurance products by price and customer rating. Once you sort by the cheapest products, it is then time to discern whether these products contain any deal-breaking exclusions.

Often times the cheapest products are cheap for a reason, whether it be the quality of a piece of steak or the comprehensiveness of your insurance. Gathering the list you made earlier, find out if these exclusions are things you can live with or present a danger to your business. Customer reviews and feedback is also a good method for weeding out those policies that have an inordinate amount of small print. If you still have questions, contact an insurance broker by visiting the British Insurance Brokers’ Association (BIBA) website.

If you opt to deal with an insurance agent, make sure the company is a member of the Association of British Insurers (ABI) to confirm you are receiving the proper advice.