In the UK, most business insurance policies will include public liability at a limit of indemnity of £2,000,000.
Depending on your trade, you may be able to get cover with a reduced limit of £1m, but the norm is to get cover for £2m. You may find though, that if you are working (providing services to) for, or providing products to, another company or public sector body, that they insist on you having an increased level of cover. Usually, you will find this out as you have to complete a form which provides details of your insurance cover.
The increase is usually from £2m straight up to £5m. Nearly all UK insurers will provide this cover, at an increased premium. It is becoming more and more prevalent nowadays for companies to insist on you having an increased level up to £10,000,000. You may well wonder whether you can possible cause damage or injury that will cost this much, but this is irrelevant. The contract will state you need this cover and unless you can prove you have it, the contract will not proceed.
Although the potential of a loss of this magnitude is very, very low, insurers cannot always take the chance that they could be faced with this potential loss. Therefore, most public liability insurance policies from a single insurer will be limited to £5m. So what can you do if you need the £10m?
What happens in these cases is that your insurance broker will approach another insurer to get what is called an “excess of loss” layer. In simple terms, insurer a gives you cover for the first five and then insurer b provides the additional five, which adds up to the ten that you require.
As the potential for insurer b to have a loss is vastly reduced, because there has to be a loss of over £5,000,000 for them to suffer, then the prices for this excess layer are fairly low. As long as you are not doing anything very high risk or working in a high risk environment (ie nuclear power plants) then the annual premium should only be around £550.
