Public Liability Insurance

(What Companies Are Doing to Protect Themselves From Lawsuits)

Written by Jessica Huneck
Written by Jessica Huneck

Jessica Huneck is an insurance writer from She began her writing career in 2011 and has since earned herself a bachelor's degree in English writing.


You have worked hard to build your business, its reputation and its customer base. You take pride in your services or products and your employees are more like family than coworkers. 

You do everything you can to protect the business. That’s why finding the right public liability insurance policy is so important. Don’t let one unfortunate event threaten all you have sacrificed to have the business you do today.

In 2005 plaintiffs won in more than half (56%) of all general civil trials concluded in state courts, according to the Bureau of Justice Statistics. Among winning plaintiffs, the median final award was $28,000. About 4% percent of winning plaintiff were awarded $1 million or more. 

The Bureau also found that there have been marked increases in median jury awards for tort case categories. This has been particularly noticeable in product liability trials, where the median awards were about 5 times higher in 2005 than in 1992. 

You don’t want leave such a potentially significant cost to the chance that your business will come out on top in court, nor do you want your business to suffer the financial losses of an expensive court battle. You want a public liability insurance policy that can protect you in the event of a lawsuit.

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Perhaps you are new to being an entrepreneur and hope to build a reputable, successful business. You don’t want to open your doors before learning how to protect yourself from a lawsuit stemming from a personal injury or property damage claim. 

A public liability insurance policy can not only help an injured party get back on their feet, it can also mean the difference between a small road bump for your business or closing the doors.


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What Can Public Liability Coverage Do For Your Business?

Public liability insurance protects a company’s assets and pays for obligations, such as medical costs incurred if someone is hurt on your property or when property damages or injuries are caused by you or your employees. 

Liability insurance also covers the cost of your legal defense and any settlements or awards, should you be successfully sued. Typically these include compensatory damages, nonmonetary losses suffered by the injured party, and punitive damages.

Even if your business does everything right, there is always the chance that an accident will happen. With the right insurance policy, you can carry on with your business knowing that should the worst happen, the medical costs for the injured party will be paid or their property repaired or replaced. 

You can also rest easy knowing these costs will be paid without draining your business bank account.

What Is Covered Under Public Liability Insurance?

Public liability insurance covers compensation and legal fees if your business is found responsible for injury or property damage to a member of the public. This could be a client, customer, supplier or passerby. 

The protection offered by a public liability insurance policy is simple but crucial. At the most basic level, it protects your business from legal costs and payments awarded to an injured party or damage to their property that’s caused by your business.

Public liability insurance could cover the cost of replacing a laptop damaged by a coffee spill by a computer repair person; medical bills due to a slip and fall because you forgot to put out a wet floor sign; or costs associated with food poisoning caused by tainted meals served at your restaurant or event.

Does Your Business Need Liability Insurance?

We live in a litigious society. Even if you think you’re unlikely to face a public liability claim, insurance is a wise, affordable investment. Annual premiums range from $750 to $2,000 depending on your line of business and coverage needs. 

That’s certainly a lot less than the thousands, if not millions, of dollars you would spend fighting a case in court or paying a judgment.

A public liability policy can be purchased on its own, but it can also be included as part of a business owners policy (BOP), which bundles liability and property insurance into one policy. 

If you have a BOP, identify your liability coverage limit. You may find that it is inadequate, in which case you may need additional coverage through a separate policy.

How Much Public Liability Insurance Coverage Is Necessary?

The amount of public liability insurance that your business will require largely depends on the level of risk that it undertakes on a daily basis. You will probably find that there are accepted minimum standards for the particular industry in which you do business, and your clients may specify requirements in this area. 

If you are working on a government or local authority contract, you will usually find that they stipulate a minimum level of coverage.

A retailer needs more coverage than someone who operates a house cleaning business. A bar and grill that serves beverages and food daily needs more coverage than a business or organization that hosts a one-time or annual event offering food and drink.

How to Determine Your Coverage Needs

The coverage you need depends on the type of business you are in and the perceived risk. A building contractor will need more coverage than a web designer or consultant. 

Your business location is also another factor, as damages awarded to plaintiffs claiming personal injury tend to be larger in some states than others.

The U.S. Small Business Administration offers these tips for buying commercial insurance:

  • Assess your risks. Determine the likelihood that a customer or other third party could be injured while on company property, and the probability that you or an employee could cause damage to another person’s property while conducting business.
  • Shop around. The coverage and costs for pubic liability coverage vary from company to company. Comparing a number of quotes from a variety of insurance providers can get you the best coverage and the best rates.
  • Find a reputable, licensed agent. Business insurance agents can help you find policies that match your business needs. Independent insurance agents can shop for you with a variety of insurance companies and are much more likely to find you the most affordable rates.
  • Assess your insurance coverage annually. As your business grows, so do your liabilities. You don’t want to be caught underinsured should an accident happen.  

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Where Can I Buy Public Liability Insurance?

The knowledgeable, independent insurance agents are experienced in helping business owners large or small to find the right insurance for their companies. 

An independent agent can assist you in identifying your business risks and pairing them with a suitable comprehensive public liability insurance policy. 

The independent status of these agents enables them to find you a number of quotes from a variety of providers. This ensures you will find the best coverage at the most affordable rates, since our agents work for you, not the insurance company. 

Don’t leave the future of your business to chance. You want a public liability insurance policy that can protect you and your customers. Contact a local agent today.  

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