What do I need to know about public liability insurance for the small business?


Everyone is exposed to the risk of public liability, especially businesses whose activities involve providing services to others. The number of commercial liability lawsuits nationwide is too high to ignore. Every business owner needs some form of protection for their business against public liability.

There are two major ways to obtain public liability insurance for your business. If you run a big corporation, a commercial general liability policy (CGL) is probably your best alternative. But if you have a small business or a medium-sized company, the public liability protection that is right for you comes in the form of a Businessowners policy (BOP).

How Small Business Public Liability Insurance Works

A Businessowners policy has two major coverages: a business property coverage and a business liability coverage. The business liability section of a BOP provides public liability insurance protection in the following situations:

  • When the insured business owner is found legally liable in court for causing bodily injury to others.
  • When the business operations of the insured cause property damage to a third party and the business owner's public liability is established in court.
  • If the insured small business owner is found legally liable for causing personal or advertising injury such as libel, slander, privacy violation or copyright infringement.

In addition to the public liability insurance coverage, a Businessowners policy provides coverage of the medical expenses of others who may happen to be injured on the commercial premises of the insured, or as a result of the business owner's commercial activities. The medical expenses that the injured party has incurred are covered by the Businessowners policy of the insured, irrespective of liability.

The public liability insurance provider is also responsible for covering any legal costs necessary for the defense of the insured, provided that the policy covers the respective claim.

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