8 Things You Need to Know About Commercial Liability Insurance

As a business owner, you need to do all you can to protect yourself and your business if something goes wrong.

For example, you want to protect yourself against legal action from a member of the public, especially if you didn’t do anything wrong. You also want to mitigate the risks for scenarios like theft or damage to your property.

This is where commercial liability insurance comes in.

If you’re not sure what commercial liability insurance is or whether you need to invest in a policy for your business, this guide is for you.

Below, we’re going to share with you eight things you need to know about this type of insurance policy for your business.

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1. What Is Commercial Liability Insurance?

Commercial liability insurance is a broader type of policy that protects your business against a variety of more general risks. This typically covers things like injury claims, theft, or property damage.

That being said, as every policy is different, it’s important to know what’s actually covered by your commercial liability insurance policy. That way, you can fill in any gaps or take out separate policies if needed.

2. Does It Go by Any Other Names?

For the purpose of this guide, these policies will be referred to as commercial liability insurance, but this isn’t the only name it goes by. In fact, the term commercial liability insurance tends to be used more by American companies.

In the UK, this is more commonly referred to as business or general liability insurance, or it can be broken down into separate categories depending on the type of business you have. Often, it can also be understood as a larger combination of ‘public liability insurance’ and ‘product liability insurance.

3. What Does Commercial Liability Insurance Cover?

As we have said, commercial liability insurance offers a broader coverage as it tends to cover multiple different policies in one. Some of the key areas that commercial liability insurance covers include:

Loss, theft, and damage to your equipment
Damage to your property
Employee sickness or injury
Business interruption – such as closure due to flooding or bad weather conditions
Any public injury claims such as slips, trips, or falls
Public property damage caused as a result of your business
Third-party business or financial loss that has been caused as a result of your work

So essentially, the main purpose of commercial liability insurance is to protect you from third-party claims, as well as issues out of your control like weather damage.

4. Do Self-Employed Professionals Need Commercial Liability Insurance?

Those who are self-employed and work on their own might be wondering if they too need commercial liability insurance. Interestingly, some self-employed professionals might be most in need of this type of policy.

This is because they, and they alone, will be responsible if something goes wrong and a member of the public makes a claim against them. Without a bigger company behind you to help cover any incurring costs, a legal claim or any theft or damage to property could be a huge financial blow to a self-employed professional or contractor.

Therefore, it is advised that you still get commercial liability insurance, even if you see yourself as a one-man band.

5. Is Commercial Liability Insurance a Legal Requirement?

Despite its many benefits and the fact that it is highly recommended, commercial liability insurance is not actually a legal requirement for businesses. The only insurance required by law in the UK is employers liability insurance for those companies that plan to hire staff.

That being said, lots of clients and vendors will insist that any business they work with has commercial liability insurance before they’ll sign a contract with them. What’s more, some trade associations will not allow you to register your business with them if you don’t have a valid insurance policy.

6. Who Should Get Commercial Liability Insurance?

Commercial liability insurance can protect your business against a myriad of risks or insurance claims.

So essentially, it doesn’t matter whether you run a small business, a huge company, or you are a self-employed professional; commercial liability insurance can help to protect you and your company against unexpected costs.

This means that pretty much every business should get some form of commercial liability insurance. However, any business that works with the public in any way should certainly consider some insurance – for example, those running shops, cafes, pubs, or restaurants.

Not only this, but tradespeople and those working in both public places and private homes should make sure to cover themselves. These might be plumbers, electricians, ground workers, building contractors, and more.

So I guess what we’re trying to say is that although it is not a legal requirement, pretty much every business should make sure they are covered by some sort of commercial liability insurance. Even if they choose a subsection of this like a smaller public liability policy, rather than getting comprehensive cover.

7. How Much Does It Cost?

With so much already on their plate, it’s understandable that the cost of a new policy might be a concerning factor to business owners. However, commercial liability insurance is definitely worth investing in for peace of mind, and best of all, it doesn’t have to be a huge expense.

Some companies offer policies starting from as little as £5 to £10 a month, depending on the size of your business and the type of cover you need.

So before you write it off as an expense that you can’t afford, do some shopping around to look for the best deals.

8. How Much Protection Can You Get?

Finally, as well as being a good investment, most commercial liability insurance policies will provide a huge amount of financial coverage. In fact, most insurers offer a minimum of £1 million as standard, going anywhere up to £10 million.

Of course, every policy is different, and you can choose the level of cover you need for your business, getting a tailored package. But access to compensation this large can be a real lifesaver should someone make a claim against your business.

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