Public liability insurance

Public liability insurance refers to business insurance that covers claims by the general public for medical expenses and other costs resulting from injuries, death, and property damage involving your business. The general public includes customers, visitors, and delivery personnel.

This type of protection falls under general liability insurance, and it's included in a business owner's policy (BOP). You may also see it called premises liability insurance, which covers third-party accidents specifically on your business property.

Public liability insurance covers the cost of third-party injuries and damage claims attributed to your business. This includes incidents at your business and locations related to your work, such as a client's home.

As this falls under a comprehensive general liability insurance policy, should a customer or member of the pubic injure themselves on your property, your public liability insurance policy would cover the cost of bodily injuries, property damage, and legal costs for any related lawsuits, within your policy limits, after you meet your deductible.

This type of insurance would also cover accidents caused by yourself or an employee while visiting a customer’s property. It does not cover injuries or damages that happen to yourself, your business, or your employees.

Any business that interacts with clients, customers, and other members of the public should consider public liability insurance.

If a client suffers a slip-and-fall injury at your workplace, or if you or your employee damages a customer’s property, it could lead to expensive medical bills or repair costs, or even a lawsuit. Public liability insurance can help reduce the financial impact on your business.

Public liability coverage is especially important for businesses that regularly deal with the public, whether it’s on-site at your business, a client’s business, or at someone’s home. It's also important for musicians and entertainers who perform in front of an audience.

Even if you conduct business online, you'd still benefit from this coverage since you interact with people when receiving deliveries or picking up supplies.

General liability insurance includes public liability insurance, and costs an average of $42 per month. Or, you can get it through a business owner's policy for an average of only $57 per month, and protect your business property as well.

The cost of public liability insurance depends on several factors, including:

• Your industry and risks
• Business size and location
• Amount of coverage you buy
• Claims history

If your business provides services to the government, such as for a school district or city hall, your contract may have a legal requirement for a certain amount of coverage. Clients, landlords, and lenders may also require you to carry this coverage.

Someone who owns a photography studio, fitness center, or a cleaning business would likely need more coverage, and would face higher premiums, than someone who performs IT consulting or website design from their home.

Public liability insurance doesn't provide full protection for your small business – in fact, your insurer probably won't sell you this coverage alone.

At a minimum, almost any type of business needs general liability insurance coverage. The premises liability portion of this policy will provide protection and cover legal fees for most common third-party claims, and your general liability policy will also cover advertising injury.

Even better, combine general liability insurance with business property coverage at a discount in a business owner's policy.

You should consider other types of business insurance:

• Workers’ compensation insurance is required by most states for businesses with employees. It covers the cost of work-related injuries.
• Professional liability insurance (also called errors and omission insurance or E&O) covers claims of financial loss from professional errors or negligence.
• Cyber insurance helps pay for costs following a data breach or cyberattack that affects you or a client.