The cost of your public liability cover is going to depend to a large extent on the nature and size of your business. Not surprisingly, the greater the perceived risk, the more your premiums will cost. The price will also increase if the sort of claims likely to be made are more serious and substantial.
Insurers base their costs on their own calculations about the odds of having to pay out and the amount that claims could amount to. They use data from actual claims to work out the risk involved in different types of businesses. If you work in an inherently risky business, this will be reflected in your insurance costs. Similarly, if you run a large business with a substantial turnover, that will cost more than a policy for a small business or self employed person.
There are ways in which you can influence how much you pay. First and foremost of course is to compare quotes so you know you are getting good value. Then you should be able to decide what level of liability cover you need. Clearly there will be a difference in what you pay if you want £10million worth of cover, compared to if you were happy with £5million.
Sometimes the level of cover you need will be decided by external factors, such as minimum levels set by companies that you do work for. If you do contract work for other organisations or companies it is not unusual for them to specify what level of public liability insurance you need to have. If you don’t have that level of cover you will not be considered for the work.
You need to re realistic when deciding what level of cover you need. A policy offering £5million might sound like a lot of money but a claim from serious injury or death can very quickly mount up to significant sums of money. Having millions of pounds worth of cover does not mean that your policy is going to cost a lot of money. bear in mind that the chances of you actually having to make such a claim are very small, which is part of the insurer’s calculations.
There may also be an option to decide on an excess for the policy. If you opt to accept a higher excess then the cost of your policy will be lower.