Why Is Public Liability Insurance Important For Businesses?

Public liability insurance is a requirement for any business that deals directly with clients, customers and the general public on its own premises, or in their client’s homes or businesses. While public liability insurance is a must for businesses wishing to successfully engage customers, you might be surprised to learn that a good amount of businesses don’t have it.

The fact that some businesses lack public liability insurance isn’t just a problem for the business’s customer base, but for the business itself; not having public liability insurance can mean astronomical fees in the case of an on-site accident, and can result in companies paying large sums to customers or a member of the general public who was harmed on the business’s premises or by its products.

What Is Public Liability Insurance?

Public liability insurance is coverage that protects businesses against accidents that occur with their products and/or on their premises or at a customer’s home when someone from the business is involved. Public liability insurance covers accidents or damage of property or persons, which means that any accident incurred on the business’s property or when someone is using the business’s product, is covered. It also covers employees while in the field in the event of an injury or if property gets damaged.

For example, if a member of the public claims to have slipped and fell on the premises of a business, they may seek monetary compensation from the business for any expenses that may arise from it, including mental anguish or missed work. With lawsuit rulings or settlements known to end up in millions of dollars, it’s crucial that businesses have public liability insurance in place.

The same goes for technicians or representatives that interact with customers or the general public in their own homes; if a business’s employee accidentally damages a piece of property or injures an individual, he or she is liable for the damages and expenses associated. Having public liability insurance is one way to protect employees from such incidents while in the field on the business’s behalf.

Does Your Business Need Public Liability Insurance?

Most likely, yes. Businesses that don’t have any public liability insurance are taking a gamble every time they interact with customers, clients and the general public. If an accident should occur that results in an injury or property damage, the business will be held liable for it. If the business lacks public liability insurance, it will be held responsible for paying settlement money, court fees and whatever other expenses are deemed necessary by the court.

If a business has a public liability insurance policy, the insurance policy pays the settlement and any additional fees associated with the incident. While public liability insurance isn’t required by law, there are some industries where it is the standard to have public liability insurance coverage1.

To find out if public liability insurance is standard for your industry, ask a professional insurance broker about coverage options and how they pertain to your business structure. 


  1. Insurance By Industry, Liberty Mutual Insurance