Public Liability Insurance: Cost & Cheap Quotes From $7/mo

Homepage > Business Insurance  >  Public Liability Insurance: Cost & Cheap Quotes From $7/mo

The operations of your business can result in injuries to customers, vendors, visitors, and other members of the public. As a result, your business might be required to admit public liability and will find itself facing lawsuits and compensating community members.

Be vigilant and prepare for the worst. Get your business public liability insurance (PLI) aside from commercial auto insurance and professional indemnity insurance. In this discussion, we’ll answer these important questions:

• What is PLI insurance?

• How much does public liability insurance cost?

• Where to get the best public liability insurance?

• How does public liability insurance differ from general liability, professional liability, and other related insurance policies?

What is Public Liability Insurance?

So what is public liability insurance (PLI)? Public liability insurance is an insurance policy that grants protection when your business is liable for the bodily injuries or property damage of customers, vendors, and other members of the public. 

Though available sometimes as a stand-alone policy, insurance companies offer public liability insurance for business as a coverage in general liability policies or as an optional coverage in a business owner's policy with these other casualty insurance products:

• Professional liability insurance

• Non-owned/hired auto liability insurance

• Rented premises liability insurance

• Liquor liability insurance

• Product liability insurance

• Directors and officers liability insurance

• Excess liability insurance

The U.S. public liability insurance market is far from declining. As the study of Prudour shows, the public liability insurance market in the U.S. is set between $355.2 million-$415.21 million in 2021 and will grow at a rate of 4.8% from 2022-2031. Nevertheless, this doesn’t mean that it comes without issues.

One issue with the public insurance market is the continued rise in premiums. For example, one study reported that price increase averaged 15%-20% in the past three years in Ireland. The same study also showed that 70% of businesses didn’t see pricing as fair or justified.

The continued rise of premiums for public liability is also true for the United States. A survey published by Marsh showed that prices for casualty insurance, which public liability is part of, have increased up to 9% in the fourth quarter of 2020.

It’s good that the price increase of public liability insurance in the United States isn't as drastic as in Ireland. Still, studies show that rising premiums is a trend, and this is alarming somehow.

Does The Law Require Businesses To Get Public Liability Insurance?

No laws in the United States require businesses to get PLI insurance nor punish the failure to get the coverage. But in practice, you might need to get PL insurance because of these reasons:

Commercial Lease

All landlords require business owners to get public liability insurance policies before signing a commercial lease. In connection, it’s almost impossible to get a space without the coverage. 

If you don’t have public liability insurance, then landlords won’t grant a commercial lease. This is because your business can’t cover the injuries or property damage, and affected parties might file a claim on the landlord’s insurance policy instead. 

Licensing 

If you’re a plumbing, construction, or electrical contractor, authorities might require public liability insurance for licensing purposes. 

Access Events

Event organizers will require you to get public liability insurance before doing business within their premises. The policy ensures that you can cover costs and event organizers won’t have liability over the bodily injuries or property damage your business causes during the event. 

Bid Contracts

Clients will require contractors to get a specific amount of public liability insurance. This is why it’s easier for your business to win and close deals if it has public liability insurance in place. 

What Does Public Liability Insurance Cover?

Public liability insurance covers the following if your business faces a claim for bodily injury or property damage:

• Defense costs such as attorney fees, investigation fees, administrative fees, and court filing fees

• The amount you must pay to the claimant by virtue of the court’s judgment

• Settlements

• Reimbursement for property damage 

• Medical payments

So how much money can you get? Public liability insurance provides $300,000-$2 million coverage depending on the company that underwrote it. 

Who Must Have Public Liability Insurance?

Businesses that constantly interact with people must have public liability insurance. Here are some examples:

• Retail stores

• Gas stations

• Consultancy offices

• Warehousing businesses

• Construction companies

• Appliance and computer repair shops

• Appliance and furniture stores

• Lawn care businesses

• Pool cleaning businesses

• Residential cleaning businesses 

• Renovation and home addition contractors

• Car retail

• Car rental businesses 

• Amusement parks

• Playgrounds

• Arcades

• Grocery stores

• Coffee shops

• Clubs, bars, and taverns

• Hotels

• Pet shops

• Salons

• Barbershops

• Spas

Example Situations Where Public Liability Insurance Can Help You

As said earlier, public liability insurance takes care of claims for bodily injury or property damage sustained by a customer, vendor, visitor, or any other member of the public. You’ll find the policy useful in these situations:

• A customer or visitor slipped and fell while on the premises of your store or office

• Your or an employee inflicted a customer with property damage or bodily injuries while working

• You need to go to a client’s property to do work. While in there, an accident happened that damaged the client’s property and injured people nearby

• Your business caused an accident. As a result, people got hurt and had their property damaged

• Your business’s commercial building caught fire, and it spread to other properties. The other buildings were damaged, and their occupants were severely hurt

Can You Get Public Liability Insurance Even If You Don’t Have A Business?

You don’t need to have a business to become eligible for public liability insurance. Insurance companies underwrite public liability insurance for self employed technicians, medical practitioners, artists, and other professions

How Does Public Liability Insurance Differ from Other Types Of Business Insurance?

General Liability vs Public Liability Insurance

Public liability insurance takes care of the resulting costs if your business faces a claim for bodily injury or property damage. It only covers these perils and nothing else.

Meanwhile, general liability insurance is very broad. It doesn’t only cover claims for bodily injuries or property damage but also:

• Slander, libel, invasion of privacy, and copyright infringement

• Your liability to a rented commercial space that fire damaged

• Bodily injuries or property damage caused by a defective product, which the customer bought

• Vehicular accidents caused by a borrowed or hired vehicle

Another thing to remember when thinking about general liability vs public liability insurance is that the latter is included in the language of the former.

Public Liability And Professional Indemnity Insurance

You also need to know the difference between public liability and professional indemnity insurance.

Unlike public liability insurance, professional indemnity insurance doesn’t cover bodily injuries or property damage.

Instead, it kicks in when a client or any other third party files a claim because your business caused economic or financial losses by committing:

• Inaccurate advice

• Negligence

• Misrepresentation

• Breach of confidentiality

• Breach of contract

• Missed deadlines

• Violation of fair dealing

Public liability insurance is underwritten as a claims-made policy, as we said earlier. However, insurance companies underwrite professional indemnity insurance as an occurrence or claims-made insurance product.

Though different in terms of the perils covered, public liability and professional indemnity insurance also have similarities:

• Both take care of defense costs and settlements

• Similar to public liability insurance, professional liability insurance can be a part of general liability policy’s language

Public And Product Liability Insurance

How about public and product liability insurance? How do these two differ?

Let’s talk about their similarities first. Both public liability and product liability insurance provides the money that can be used to cover defense costs and settlements. Also, they are offered as inclusions in general liability insurance of food liability insurance packages.

Product liability and public liability insurance policy differ in terms of the perils they cover.

Bodily injuries or property damage caused by the product of your business falls out of the scope of public liability insurance. Product liability insurance takes care of this peril instead.

Product liability insurance provides coverage if the product of your business causes injuries or property damage because of:

• Incorrect labeling

• Manufacturing defects

• Design errors

Moreover, product liability insurance can also take care of claims for food poisoning or foodborne illness if your business is in the food industry.

Public And Employers Liability Insurance

Aside from public liability insurance, your business also needs employer’s liability insurance.

Small business public liability insurance doesn’t cover costs if an employee sustains an injury or disease at work and then files a claim against your business.

Employer’s liability insurance takes care of this peril, and pays for defense costs and settlements.

Also, insurance companies don’t offer employer’s liability insurance as an inclusion to general liability insurance. Instead, it’s available as an add-on to workers compensation insurance.

Public Liability Insurance for Events

You can get public liability insurance for events. Insurance companies include this in their events insurance policy together with event cancellation insurance, equipment coverage, liquor liability coverage, and more.

You need public liability insurance for events if you’re setting up a:

• Festival

• Wedding

• Sporting event

• Live music event

• Theater event

• Company event

• Conference

• Workshop

• Trade show and expo

• Seminars

Public liability insurance for events covers the bodily injuries or property damage of the participants, vendors, and volunteers. Its coverage might also extend to key persons of the event.

Short Term Public Liability Insurance

Short term public liability insurance is offered as an inclusion to general liability policies that provide protection for one day, week, or month.

Temporary public liability insurance also takes care of bodily injuries or property damage. What makes it special is that you get to decide its length of coverage.

Public Liability Insurance Cost

So how much is public liability insurance? Public liability insurance average cost is $21 per month or $252 per year. This is just an estimate. Your actual rate can be higher or lower. 

To get a further idea of public liability insurance cost, take a look at this table that shows how much recommended insurance companies charge for the policy.

We’re done on how much for public liability insurance. Let’s discuss the factors that affect the cost of premiums next. 

Factors That Affect The Cost Of Public Liability Insurance 

Insurance companies consider these factors when determining public liability insurance price:

• Claims history

• Business profile

• Number of employees

• Policy limits

• Location

• Whether or not you want to name additional insureds

• Annual revenues

• Employee payroll

How To Get Cheap Public Liability Insurance?

Your public liability insurance quote can become cheaper if you decide to pay premiums for the whole year. By doing this, you get a 2%-3% reduction in rates. 

Another way to get cheap public liability insurance is to have high deductibles. A deductible is an amount of money you return to the insurance company after it grants your claim. Consider getting a $1,000-$2,500 deductible on your public liability policy. 

Last but not least, consider comparing quotes. Comparing quotes allow you to find the best public liability insurance with the most reasonable rate. Click the “Get Quotes” button on this page and start comparing public liability insurance quotes online.