The Inevitable Cost Of Not Having Public Liability Insurance

Starting your own business is one of the most exciting and liberating things you can do. There’s no feeling quite like being able to cast off the yoke of a dead end job in which your skills and talents have atrophied for years and going into business for yourself. Yet the path of entrepreneurship is long and winding and beset on all sides with hidden costs and pitfalls. Most entrepreneurs begin their careers with a very tight grasp on the purse strings. They’re often conditioned to believe that unnecessary overheads should be scythed down to protect the sanctity of their profit margin.

While there’s certainly an argument that new businesses should keep a close eye on their overheads, there are some costs that may not represent an immediate return on their investment but are still extremely important for the safety and wellbeing of your business and all who patronise it. Amongst them is Public Liability Insurance. While it may not be amongst the first overhead costs that springs to mind when putting your SME together, it’s undeniably amongst the most important.

What is Public Liability Insurance?

Public Liability Insurance protects your enterprise from the ensuing legal costs, damages and awards if a third party like a customer or client incurs an injury, damage to personal property or even accidental death on your premises. While these are not the only grounds upon which a claim can be made they are amongst the most common.

Why so many SMEs don’t have Public Liability Insurance

There are a few reasons why a fledgling SME may not have Public Liability Insurance. They may eschew it out of a misguided desire to manage overhead costs. They may view their overheads only in terms of fiscal multipliers and deem it among the less worthy as it does not represent a significant or immediate ROI. They may overlook it because it’s not as exciting or immediately beneficial as something like digital marketing, branding or social media management. Perhaps they don’t realise just how at risk they are. Make no mistake; if there’s the remotest chance that a third party can be injured on your premises, public liability insurance is an absolute necessity.

What can happen if you don’t have it

As you’ll see from a comprehensive Public Liability Insurance policy needn’t cost the Earth. Not having one, however, can seriously damage your business. You will be liable for any damages awarded to an injured third party and this could cripple your business, resulting in a profound loss of cash flow that may require you to liquidate some of your assets. Yet more serious is the irrevocable damage that can be done to your reputation as you are seen to be floundering in the aftermath of a claim.

In conclusion

Despite representing a relatively low overhead cost (you can get a decent policy for less than £5 a month), Public Liability insurance can save your business a fortune in capital and reputation if someone should experience an accident on your premises. Although it is not a legal requirement, all SME owners should consider it an absolutely essential cost that is easily borne yet can prove a valuable lifeline in the case of a scenario that no entrepreneur welcomes, but all should make provision for.


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