Why businesses with flexible workers need public liability insurance

Russell Corbould-Warren
Chief Underwriting Officer
Collective Benefits

We live in an increasingly litigious society – one where the words no-win-no-fee have become a sort of mantra for accidents that ‘weren’t our fault’. Which is why many businesses opt to protect themselves with public liability insurance – an insurance cover that pays if a member of the public is injured or their property is accidentally damaged while a job is being completed. 

These claims can come in all shapes and sizes. A customer could end up with a broken garden fence thanks to a courier’s careless cycling. Or a member of the public could end up with a life-changing injury because of an accident on a construction site. A cleaner could knock over and break an expensive household artefact …the list goes on. In short, without public liability insurance, an incident like this could end up costing a business thousands or millions in legal and compensation costs. 

When a business is protected with public liability insurance, the costs associated with a public liability claim are covered (which could literally stave off bankruptcy - claims here can easily be in the millions of pounds). 

But what about companies that rely on flexible workers? The workers themselves are responsible for taking out their own insurance, right?

Technically, yes – a flexible worker is a separate entity to the business they use to get work. And yes, they can take out their own insurance. But things aren’t quite as straightforward as that. Let’s take a closer look.

Not providing public liability insurance for your flexible workers could leave you exposed to risk

If your business relies on flexible workers, you have a few different options when it comes to public liability insurance. You can:

  • Have your workers buy it themselves
  • Use a traditional insurance product (which may not be tailored to the specific needs of your business, or on-demand businesses in general)
  • Use a specialised public liability insurance product that’s designed for businesses that use flexible workers (so, workers are only covered for the specific hours they’re working for your business)

It might be tempting to go for the first option, but it’s important to realise that this still leaves your business open to risk, because:

Your company might end up having to pay for accidents caused by a flexible worker anyway

It’s true, flexible workers who use your business can take out their own public liability insurance. But what about those that don’t? If someone brings a claim against them because of an accident they had while working for your business, and they haven’t got the right insurance, your business might end up having to pay for the claim anyway. While you might not legally be liable, you may end up deciding it’ll cost your business less to pay for the claim than to deal with the PR fallout of not paying for it.

Which brings us onto our next point…

You could end up facing some pretty bad PR

If one of your workers injures someone or damages their property while they’re working for your business, but doesn’t have insurance, your company might end up in the spotlight for all the wrong reasons. 

It may be asked, for example, why your workers were able to work without public liability insurance in the first place – bringing your company ethics into question. Whatever your reasoning, getting caught in an ethical grey area is never a good look. And it’s possible your business reputation could get tarnished.

It goes without saying, bad PR can create long-lasting damage for a business, leading to a decline in sales and even share price. 

Tailored public liability insurance can help you you stay protected & competitive

Even though it might seem more cost effective and simpler to have your workers get their own insurance, it can pay off to organise a tailored policy that covers them while they’re working for you. 

Not only does this help protect your business from reputational damage if a worker has an accident and they’re not covered, it can help you attract and retain workers too. 

Providing insurance can help you attract & retain workers

In the war for talent – which is aggressive in the gig economy, to say the least – providing workers with insurance is a great way to set your business apart from competitors. 

It shows you genuinely care about your workers, and provides a clear signpost that yours is a trustworthy company to get work through. It also saves workers a lot of hassle – to sort their own insurance, they’d need to set up as a company or an independent contractor, and do their own research. Not forgetting it saves them money, acting as an attractive work perk. 

Our own clients report that they’ve had explicit feedback from workers stating they were attracted and/or retained by having their public liability insurance provided. Plus, a recent survey we carried out of 1000 flexible workers in the UK showed that the vast majority of workers would choose a lower paid job with benefits over a higher paid job with no benefits. 

With all this in mind, it really is well worth it for business to look into offering their workers public liability insurance. Not only does it provide peace of mind that your company is protected, it helps your workers feel more valued, too – ultimately enabling you to reap the rewards of a happier, more motivated workforce. Sounds pretty good to us. 

Want to learn more? Find out about about Collective Benefits’ public liability insurance.

May 12, 2022