What is public liability insurance?
Public liability insurance can provide protection if you’re taken to court because your business activities cause damage to someone else’s property or result in someone being injured or killed. It can cover your legal costs and any compensation you may have to pay.
Any business can take out public liability cover, regardless of size or type. This includes those who are self-employed, freelancers and sole traders.
Some companies and organisations will only award contracts if the business concerned has public liability insurance in place.
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What does public liability insurance cover?
If anyone visits your premises, public liability insurance may cover you for:
Public liability insurance can cover legal fees and compensation owed, if someone is injured or suffers losses that your business is accountable for.
Damage to visitor property
If you, or one of your employees, is carrying out work on a customer’s premises and causes damage, you may be liable to pay compensation. Public liability insurance may cover these fees for you.
Cost of repairs
If you, or your business, causes damage to someone’s property or contents, your insurance may cover the cost of repairs.
If someone suffers an injury or illness, owing to negligence or malpractice, you may be forced to cover the cost of medical treatment. Your insurance can protect you from having to pay these fees yourself.
Injury or death
If someone is injured or dies on your business’ property, or work carried out is found to have been the cause, you will be held accountable. Public liability insurance may cover the significant cost of compensation.
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Do I need public liability insurance?
Public liability insurance is not compulsory (except in certain cases, such as if you own a riding stables). Businesses that interact with the public, such as restaurants, consultants, shop owners, gardeners and beauticians, are urged to take out public liability insurance in case a claim for compensation or damages is made against them.
While it may not be a legal requirement, you may find that clients or industry regulators may insist that you to have it. Therefore, you may find it much easier to operate with public liability cover in place.
Types of business/profession which should consider taking out public liability insurance include:
- Builders - working in construction includes a range of potential hazards that can cause injury or damage to property
- Carpenters/joiners - because you’re working with tools and on others’ property, customers and contractors usually expect you to have cover
- Electricians - electrical damage, which can also lead to fire damage, can result in expensive claims being made against you
- Plumbers - a leak or poorly fitted pipe could lead to extensive water damage in somebody’s home
- Gardeners - working with tools, including power tools, can lead to injuries or damage if not used with care
- Painters/decorators - something as simple as spilling paint on a carpet or expensive piece of furniture can lead to costly claims
- Taxi drivers - if you have an accident and a passenger is hurt, you’ll likely need to pay compensation. If you work with councils or local authorities, you’ll be expected to have cover
- Pubs - can cover customers if they are injured on the premises, or fall ill after eating from your menu
If you need further advice, you can call our partner Simply Business on 0333 016 5956***.
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If public liability insurance isn’t compulsory, why should I bother?
If it’s at all possible that someone might make a claim against you for an incident that arises from your business activities, then public liability insurance can give you peace of mind. It also makes good business sense - clients may well want to see your public liability insurance certificate before awarding you a contract or giving you business.
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.
How much does public liability insurance cost?
Size of your business
The price will be determined by the size and type of your business
Type of your business
Manual businesses generally pay more than clerical ones
May have to pay more
You may have to pay more if you’ve made claims in the past
What do I need to get a quote?
When you start a public liability quote with us, it’s a good idea to have some basic information about your business, including:
• Your trade or profession
• Type of business (sole trader/partnership/limited company)
• How long you’ve been in business
• Your expected turnover for the year ahead
We’ll ask you questions to make sure we have all the information we need to provide you with a list of suitable quotes.
The quote process will also give you the option to include other types of business insurance, such as cover for your business equipment and premises.Get a quote
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***Lines are operated by our trusted partner, Simply Business. Open Mon-Fri 9am-6pm, Sat 9am-2pm
What our expert says…
Business insurance expert
"When you’re running a business, there’s always a possibility that you might accidentally do something that results in harm to someone or damage to their property. If there's legal action as a result, there may also be a requirement to pay compensation. If you have no insurance in place, the legal costs and compensation payments can be financially crippling, but public liability insurance provides valuable peace of mind, whatever type of business you have."
Frequently asked questions
What is not covered by public liability insurance?
Typically, public liability insurance doesn’t cover damages to your business, nor injuries or death to you and your employees. This type of insurance is to cover you against claims from third parties. To cover you and your business against these circumstances, you should consider taking out business insurance.
Policies vary though, and you should read your policy carefully to be completely aware of what you’ll receive cover for.
How much public liability cover do I need?
All businesses are different, so the amount of public liability cover your organisation needs will depend on several 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.
How to check a public liability policy meets your needs?
There can be a lot to think about with business insurance, and public liability cover is no different. To help you make sure your policy is right for you, we’ve put together some simple things to consider:
- Does your profession or business involve dealing or working around members of the public?
- Do you have a business property which members of the public can access?
- Are you covered for the relevant areas that your business involves? You can get policies tailored for your specific business type
- Do you have the right amount of cover? Some industry regulators, local authorities and clients will require a minimum level of cover
- Does your policy exclude circumstances which relate to your business? If so, you may need to arrange additional or specialist cover
- Do you have employees? Public liability insurance will not cover claims made by them, and you’re legally required to take out employers’ liability insurance
What is the difference between public liability and employers’ liability insurance?
Public liability insurance covers you against claims made by members of the public for damages or injury caused by your business or on its property. If you employ members of staff, even if they’re temporary, students or interns, you’ll need employers’ liability insurance to cover any claims made by them.
Do I need public liability insurance if I’m self-employed?
Whether you need public liability insurance 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 an advisor on 0333 016 5956*** if you’re not sure whether you need it.
What other types of insurance may I need for my business?
Some types of business insurance are legally required, but others are optional and depend on your profession or type of business you own. Here are some examples of the types of business insurance you might need:
Employers’ liability insurance – you’re legally required to have this insurance, even if you employ just one person.
Business interruption insurance – if your business is forced to close due to unforeseen circumstances, this can cover lost profits.
Van insurance – if you work in construction, delivery or any other business which requires the use of a van, you’ll need to cover your business vehicle(s).
Commercial property insurance – to protect your business premises.
Business contents insurance – to protect your business equipment.
For more information, check out our guide to the different types of business insurance.
Is public liability insurance tax deductible?
Public liability insurance is an “allowable expense”, which means it’s tax deductible. Other types of business insurance are also tax deductible.
Do small businesses need public liability insurance?
While a small business may appear less susceptible to compensation claims, any claims that are made against you may do considerably more damage, financially, leaving your business vulnerable. To avoid this, you should at least consider the idea of protecting yourself with small business public liability insurance.