Public Liability insurance protects you if a 3rd party (a member of the public) sues your business alleging that your negligence caused them some type of bodily injury, death or property damage. The most common accident that can result in this type of claim is a ‘slip and fall’.
When you are subject to a legal action, you would notify your insurance company and they would appoint a lawyer to defend you and pay costs and legal fees associated with the lawsuit.
This includes any expenses that you incur in order to assist with the defence such as lost wages from missed work or transportation costs to get to and from court. On top of these supplementary costs, they would also pay for any judgements awarded by the courts against you up to but not exceeding your chosen limit of insurance.