Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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public liability business insurance

With so many business insurance requirements, some decision makers believe that public liability business insurance is unnecessary and redundant. 4

Nothing could be further from the truth. Some states require every business to carry adequate public liability business insurance coverage. The remaining states have requirements for certain types of businesses that draw public visitors at various levels.

Prevent any unnecessary financial calamities to your business by obtaining public liability business insurance. Compare quotes and find the best rate. Enter your zip code above to begin!

What Is Public Liability Insurance?

Other types of liability insurance provide coverage for injuries of employees, but public visitors are covered under public liability insurance. If a person visits the premises and trips and falls because of a slippery floor, their claim would be covered under public liability. Cars that are parked outside the building are insured against damage that occurs while present on the business property. When objects fall and hurt a visitor, those claims are covered under public liability insurance.

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Who Needs to Carry Public Liability Insurance?

Certain situations dictate the need for adequate public liability insurance coverage. Omitting this type of coverage could result in substantial loss in the event of litigation that is not covered by insurance. Insurance companies recommend this type of coverage for anyone that falls into one of the following situations:

High public traffic – Anywhere crowds gather, such as theaters, shopping centers or sporting venues, can have incidents that involve the injury of members of the public. The owner and the business operator are wise to carry sufficient public liability insurance.

Alcohol consumption – When alcoholic beverages are served to visiting members of the public, incidents can happen that cause injuries. Many localities will require these establishments to carry adequate public liability

alcohol

coverage.

Home-based with public visitors – Even homeowners who receive clients in their home offices are wise to purchase public liability insurance coverage to reduce the risk of loss due to litigation. Homeowner’s policies will have exemption clauses about business conducted on the premises.

Outdoor activity guides – Companies that take members of the public on horseback rides, rafting tours or any other activities that involve risks are required to carry sufficient public liability insurance. These activities are considered safe, but incidents do happen, and the person injured will have bills to pay. Claims that are made against an uninsured business must be paid from company assets, which can be devastating to the business.

What Impacts The Cost of Public Liability Insurance?

Every insurance company works diligently to calculate annual premiums that will cover their risk of loss. Those premiums are based on actual loss records from every known business industry and broken down by divisions within each industry. Detailed statistics are kept to prove the accuracy of the assessments and make adjustments for the following years. When a business owner seeks a public liability insurance policy, the following factors will impact the final annual premium charged by the insurer:

Type of business – Insurance industry statistics allow actuaries to determine the actual rates of loss for each business sector. An accountant will experience lower number of occurrences in dealing with the public than a plumbing contractor. The annual premium paid will be lower for the accountant based on actual loss records.

Location – A business operating in a small town will pay lower insurance premiums than someone operating a comparable business in New York City. One of the driving factors is the litigious climate that exists in some of the most populated areas of the country.

Premium basis – Some insurance companies will base the annual premium amount on various business factors to determine the risk of loss. For contractors, the annual rate might be based on the size of the payroll budget. For a retail store, the annual premium could be based on sales. The differences between insurers are significant and quotes are the best tools for making a choice.

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How to Obtain a Useful Quote

public liability insurance

Every quote provided by an insurance company is based on certain factors that will be the basis for the premium calculation. Public liability insurance policies are priced differently by every insurer and based on certain aspects of the business that will be insured. When pursuing quotes, the following information must be provided consistently so that the quotes are comparable.

Occupation – Insurers maintain lists of major categories of occupations that have been assessed for risk. Public liability insurance is connected to the damage or injury members of the public could sustain from efforts to conduct business. Information concerning the work performed will be required to obtain a quote.

Workers – A complete list of every person, by job title, will be used to assess the risk associated with clerical work and manual labor. Insurance companies have the right to deny claims if incomplete information is provided. Updates to this coverage would be required if the business embarks on new service offerings.

Trading date – The day that the business began to operate will be required for the underwriting process.

Experience – The number of years that the owner/principals/partners have in the occupation will be required. More experienced professionals incur fewer incidents associated with loss than novices.

Indemnity – One of the blanks on the quote request will require an estimate for the amount of coverage requested. Standard amounts range from one to five million dollars. Riskier work dictates higher coverage amounts.

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Final Decision

Every year businesses are closed because adequate insurance coverage was dismissed as “too expensive.” The livelihoods of every employee rest on the business owner’s grasp of the potential risks that lie in wait. If solid comparison actions are conducted, affordable insurance can be acquired from reputable insurance companies.

Adjustments can be made and every possible discount leveraged to cover the business without being over-insured. Prudence dictates that every avenue is pursued to cover the risks of litigation by caring public liability business insurance whenever people will be visiting the company premises.

Find the best possible policy by comparing quotes from all the major insurance companies. Simply enter your zip code below to begin?