Public liability insurance - what is it?
Public liability insurance is your protection in case your business activities kill or injure a member of the public, or damage their property. If that person takes you to court, it will cover your legal costs, as well as any compensation you have to pay.
You can take out public liability insurance no matter what size your business from a market stall or food truck, to a listed company. It can also be useful for self-employed people and freelancers, for example hairdressers, photographers and tradesmen like plumbers and electricians.
Some customers will want to be sure you have public liability insurance before they will work with you.
Frequently asked questions
What does public liability insurance cover me for?
If members of the public, customers or clients visit your business premises, it will cover you for any incidents and accidents. It will also cover you for any public events or activities organised by your company.
If you were found liable for an accident, public liability claims can run into thousands of pounds, sometimes millions for very serious incidents and your business needs to be able to cover those costs.
Public liability insurance usually covers:
- compensation payments to the person injured
- the cost of repairing damage
- legal fees involved in a court case
- any costs for hospital treatment and ambulance services which can be recovered by the NHS where personal injury compensation is payable in the Injury Costs Recovery scheme
How much does public liability insurance cost?
That depends on the type of business you run and the risks involved, how many employees you have, and your insurance claims history. The level of cover you want will also affect your premium. Businesses that could potentially face steep insurance claims when things go wrong are more likely to pay more, for example demolition experts. Manual businesses are generally seen as a higher risk than clerical businesses.
But don't forget, public liability insurance is tax deductible as it counts as an allowable expense for businesses. It's treated as a business cost by HMRC and can be deducted when you are calculating your taxable profit.
Does it cover employees?
It won’t cover employees, temporary staff, students or interns - for those you’ll need employer’s liability insurance.
Do I need it if I’m self-employed?
Whether you need it or not depends on what type of business you run rather than the number of people working in the business. If people visit your premises - say, if you run a shop - then yes, it can make sense to cover the potential risks. Talk to one of our advisor's if you are not sure if you need it.
Is it a legal requirement?
Generally public liability insurance is not compulsory, but there are a few exceptions - for example, if you own a riding stables. If you’re wondering whether or not you need it, feel free to call one of our specialists. But many businesses that interact with the public usually take it out – for example restaurants, consultants, shop owners and beauticians and manicurists, gardeners and sign writers.
If it’s not compulsory, why should I bother?
If it's at all possible someone might make a claim against you, then it will give you peace of mind. It also makes good business sense - clients may well want to see your certificate before you start work.
Local government or council contracts will usually ask you to provide proof of public liability insurance with a minimum cover level of £5 million before they do business with you.
Some business trade associations won't let you become a member or register with them unless you have a valid liability policy.
Consider it if members of the public visit your premises, you visit or work on other premises, or you work in public places.
How much public liability cover do I need?
All businesses are different, so the amount of cover your organisation needs will depend on many different factors including how much contact you have with the public, the types of clients you work with, for example local authorities, and the size of your projects.
Compare and save
If you need your first policy or its time to renew your current policy why not do a quick comparison and see if you can get a better deal? It’s easy to do and you can be switched and enjoying your new rate in no time.