What is public liability insurance?

Here we give you the lowdown on public liability insurance – what it is, where to get it, and whether or not you actually need it.

Written by

Mubina Pirmohamed

Business and landlord insurance expert

Last Updated

22 OCTOBER 2024

4 min read

What is public liability insurance?

Public liability insurance isn’t something everybody knows the meaning of. But it’s actually pretty simple. If a member of the public ever sued your business, your public liability insurance is what would protect your company. It can cover your business if it’s responsible for damage to third-party property, or injuries to a member of the public.

Who is public liability insurance for?

Public liability insurance is designed to help businesses that work with the public. Whether you’re an event organiser or an electrician, it’s definitely something you’ll need to consider. In fact, more businesses need it than you’d probably think. If you’re a tradesperson, or you own a shop, salon or cafe, it’s likely you’ll need some kind of public liability insurance in place.

In what situation might I need public liability insurance?

There are lots of potential scenarios where public liability insurance would come into its own. Let’s say:

You’re a builder and you accidentally drop a brick or tool, hitting a passer-by.
You’re a handyman and you break a client’s priceless antique vase.
You own a shop and someone slips and breaks their arm on your freshly-polished floor.
You have a food truck and a customer gets sick after eating a meal you supplied.

If your work brings you into contact with the public, there are dozens of situations where your public liability insurance could provide financial support.

Do I need public liability insurance?

If you’re not sure whether you need public liability insurance for your business, here are a few questions to ask yourself:

Do you come into contact with the public through your work?
Is it possible your work could cause injury to a member of the public or their property?
If you work from home, do clients visit your house?
If someone took legal action against your business, could you afford the cost of legal fees and compensation?
Does any company, trade body or association you work with ask you to have public liability insurance in place?

Remember, public liability insurance is there to help protect business owners from the cost of compensation claims and legal action made by members of the public.

Is public liability insurance a legal requirement?

You’re not legally required to have public liability insurance in the UK. But if your work brings you into contact with the public, it’s strongly recommended for your business.

You might also find that some companies and trade bodies won’t work with you unless you have a valid public liability insurance policy for your business.

The only exception is if you run a horse-riding business, in which case you’re obliged by law to have public liability insurance in place.

What does public liability insurance cover?

If someone sues your business and your business has to pay out for legal fees and compensation claims, public liability insurance could cover those expenses. It can offer your business protection should it have to pay compensation, and medical and legal costs, for physical injury or death to a member of the public, or damage to a property.

Who does public liability insurance cover?

Your public liability insurance policy covers your business. That’s to say, it can cover compensation claims, medical bills and legal costs if your business is responsible for bodily injury or death to a member of the public or damage to a third-party property. But it doesn’t cover your employees.

Who doesn’t public liability insurance cover?

Public liability insurance doesn’t cover your business’s staff or other employees – for that you’ll need employers liability insurance.

Employers’ liability insurance could cover you if one of your employees becomes ill or is injured as a result of working for you. If you employ one or more people or are a limited company with multiple directors, it's a legal requirement to have cover. If you're not a limited company, it's not a legal requirement to have employers' liability insurance if the employees are immediate family members, though if a policy is in place it would still cover immediate family members working for you.

What happens if I don’t have public liability insurance?

If you don’t have public liability insurance for your business and a customer takes legal action against your company, your business will have to cover its legal costs. For example, it might be that a tool drops on a passer-by and injures them. If your business loses, your company might have to pay for compensation and medical bills, as well as legal fees.

That’s why having public liability insurance in place for your business can be a big weight off your mind.

How can I compare public liability insurance?

Comparing is easy through us. Find public liability insurance quotes from a range of specialist providers.

How much public liability cover do I need?

How much public liability insurance you need for your business will depend on the nature of your company. That’s to say, how big your business is, how many people you work with, and what kind of work you do.

For example, if you’re a builder working on massive commercial projects, you’ll probably need more cover in place than someone working on a customer’s kitchen extension.

How much does public liability insurance cost?

How much you pay for your business’s public liability insurance will depend on a few things:

What kind of business you have
The size of your business
What excess you pay
How many claims you’ve made in the past

What do I need to get a quote?

When you get a quote with us, it helps to have a few details to hand. We’ll need to know:

Your profession or trade
What type of business you have (for example, you may be a sole trader, or you may own a limited company)
How long you’ve been in business
How much you’re expecting to turn over this year