Record insurance pay outs totalling at least £275 million will be made to travellers due to the coronavirus crisis, according to industry estimates.

The Association of British Insurers (ABI), which made the calculation, said this is the expected total as payouts continue in the coming weeks and months.

It means coronavirus-related payouts will dwarf the £62 million-worth of payments made for cancellation and disruption following the Icelandic volcanic ash cloud in 2010. The vast majority of coronavirus payouts will be for cancellations, the ABI said.

It said the expected total will easily surpass the highest annual figure for cancellation payouts it has seen previously – £148 million paid in 2010 for all claims, including those related to the volcano.

It is expected that some payments will be for disruption costs incurred overseas.

Around 400,000 coronavirus claims are expected.

Mark Shepherd, the ABI’s assistant director and head of general insurance policy, said: “At this unprecedented time, travel insurers are helping soften the financial blow for thousands of customers whose travel plans have been cancelled or disrupted by coronavirus.

“Along with compensation from sources, such as airlines and credit card providers, travel insurers are helping customers get through these tough times.”

ABI travel insurance members have agreed a series of pledges to ensure extra support for customers, including having in place contingency plans to deal with valid claims as quickly as possible.

Many travel insurers have recently paused the sale of cover to new customers altogether, or placed restrictions related to coronavirus on new policies.

What Does Public Liability Insurance Cover?

Public liability insurance is a relatively common business insurance cover, which covers legal liability if you or an employee is held responsible for property damage, injury, or death befalling a member of the public as a result of your business activities.

For instance, if you run a cleaning business and you or an employee forgets to put out a ‘wet floor’ sign, which results in someone slipping and hurting themselves or damaging their property, you could find yourself hit with a lawsuit.

Similarly, lawsuits could follow if an electrician installed faulty wiring, a hairdresser spilt dye on a client or their property, or a customer suffered injury while visiting your premises.

In that kind of situation, public liability insurance could cover legal fees and compensation, the value of which will depend on your individual policy, arising from a claim for damaged possessions, bodily injury or death to a member of the public, whether they’re a customer, supplier, contractor or simply a passer-by.

What kind of costs does Public Liability Insurance cover?

Typically, public liability insurance will cover the cost of repairing or replacing possessions, NHS hospital costs, legal fees arising from defending a claim, and compensation awarded to the injured party.

The level of cover is important too, as your policy will only cover costs up to the limit of the policy you take out. The options usually range from £1 million up to £10 million, so think carefully about things like the size of your business, the level of risk associated with your work, and your level of involvement with the public before deciding how much public liability cover you need.

In truth, it is best to seek advice from a specialist business insurance broker who can help to assess your risk and recommend the right level of cover.

Do I need Public Liability Insurance cover?

While public liability insurance is not a legal requirement, it can be seen as playing an important role in defending against the unexpected and protecting them against the unforeseen cost of legal action and compensation. Equally, some customers may insist you have public liability cover in place before awarding contracts, while some trade bodies may insist on it too.

Whether or not you take out public liability insurance is up to you as a business owner. But before deciding whether you need public liability insurance, it’s important to consider whether you could afford the time and expenses associated with defending a claim if you don’t have this insurance in place.