Public liability insurance

Q: What is the difference between public liability and employers’ liability insurance?

Public liability insurance covers you if a member of the public suffers injury or property damage resulting from your work. Employers’ liability insurance covers you if a member or staff makes a claim against you for injury or illness through work.

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What is public liability insurance?

Public liability insurance, also known as PL or PLI insurance, is a type of business insurance that can cover you for claims made against you by members of the public.

Public liability insurance can provide financial protection if your business activities result in someone being injured or killed, or their property damaged. 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 people who are self-employed, freelancers and sole traders.

Although it’s not legally required, many companies won’t hire contractors or businesses that don’t have public liability insurance.

Do I need public liability insurance?

Public liability insurance isn’t a legal requirement. But if your business deals with the public in any way, you could face a very hefty compensation claim if someone were hurt or their property damaged. Could you cover that cost?

You may need public liability insurance to get work. For example, local councils will often ask you to provide proof of public liability insurance coverage before they offer you a contract.

Some business trade associations won't let you register with them unless you have a valid public liability insurance business policy.

For example, the Association of Plumbing and Heating Contractors requires its members to have a minimum of £2 million public liability insurance.

What does public liability insurance cover and exclude?

Typically covered

Compensation claims

The cost of legal fees and compensation if someone suffers a personal injury or other losses as a result of your work.

Cost of repairs

If you or your business damages someone else’s property or belongings, this may cover any repair or replacement costs.

Medical fees

If someone suffers an injury or illness because of your negligence or malpractice.

Injury or death

Compensation costs if someone is injured or dies on your business property, and you’re held accountable.

Product liability

Compensations costs if you or your business provides or installs a defective product that causes damage or injury.

Not typically covered

Injury or death of an employee

For this, you’d need to claim on your employers’ liability insurance – which is required by law if you employ staff.

Damage to property you own

Public liability insurance pays out for damage to other people’s property – not your own.

Professional errors

You need professional indemnity insurance to be covered for making a professional mistake. For example, giving bad advice that results in financial loss for your client.

Intentional damage caused by an employee

You won’t be covered if someone employed in your business causes damage on purpose.

What types of business can public liability insurance cover?

There are many types of business that should consider taking out public liability insurance, including: 

Builder

Construction sites are full of potential hazards that can cause injury or property damage.

Carpenter/joiner

Because you’re working with tools and on other people’s property, customers and contractors will expect you to have cover.

Electrician

Electrical damage, which can lead to fire damage, can result in expensive claims against you.

Plumber

A leak, or poorly fitted pipe, could cause extensive water damage to somebody’s home.

Bricklayer

Imagine if a wall you built collapses, and someone is injured or killed.

Public liability insurance could protect your business financially if you have to pay compensation.

Painter/decorator

Something as simple as spilling paint on a carpet or antique table could lead to costly claims.

Taxi driver

If you have an accident and a passenger is hurt, you’ll probably be liable for compensation. If you work with councils or local authorities, you’ll be expected to have cover.

Hairdresser/barber

Taking into account the products and equipment you’ll be using, it’s a good idea to protect yourself against claims for injury or illness.

Retailer: shops and market traders

A customer could trip on a wet floor, something could fall from a shelf, or a claim for food poisoning could lead to expensive pay-outs.

Events

You could be sued if a member of the public is injured or killed at an event or activity you organised.

Cleaner

Whether your business is commercial or domestic cleaning, if you accidentally damage property you could have an expensive claim for replacement made against you.

Home businesses

If people visit your home for professional reasons, then there's a risk of being sued if someone gets hurt or their property damaged.

How does public liability insurance work?

Public liability insurance coverage can be added as part of a tailor-made business insurance policy.

It can reflect the size and type of business you run and the number of employees you have on staff.

If you’re a small business owner and are looking for the cheapest public liability insurance, you can set the amount you want to be covered for. This could help lower the cost of your premium.

However, think carefully before you set your cover at a low sum. You need to make sure your business is protected against the types of risks it could face.

Having a low cover limit may also prevent you from working with certain partners, who may insist on a minimum cover level.

What our expert says...

“It’s estimated that £7.6 million is paid out every day in business liability claims. If your business is public-facing in any way, public liability insurance could protect you.

“Whether you interact directly with customers or have business premises which the general public can enter, you’re potentially vulnerable to someone making a claim against you. If you’re taken to court and you don’t have insurance in place, the legal costs and compensation payments could be financially devastating.”

Amy Rootham, Insurance expert

How much does public liability insurance cost?

£80²

a year for public liability insurance

£6.60³

a month for public liability insurance

The cost of public liability insurance for business owners can depend on a range of factors, including:

The size of your business – the bigger your company, the more you’re likely to pay
What type of business you run – manual labourers generally pay more than desk workers, because there’s a higher risk of damage and injury
Your health and safety record – careful businesses may find their quotes are much cheaper
Your claims history – you may have to pay more if you’ve made claims in the past.

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_[2]51% of our customers were quoted less than £79.17 for their public liability business insurance in April-June 2026.

_[3]51% of our customers were quoted less than £6.60 per month in April-June 2026 for their public liability business insurance based on the monthly cost when paying for the policy in one annual payment, excluding any interest charged on instalment payments.

How much public liability cover do I need?

How much public liability cover you need depends on the risks involved with your business.

Minimum cover levels start at around £1 million to £2 million. This may be sufficient if you have a small business and limited contact with the public.

If your work is high risk or you work on government contracts, you may need a minimum of £5 million to £10 million public liability coverage.

If you’re a member of a trade body or are taking on a new contract, check you have enough cover in place.

How do I compare public liability insurance quotes?

To compare a public liability quote with us and our partner Simply Business, you’ll need to give us some basic information about your business.

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What else to consider when taking out a public liability policy

Here are some other things to know about public liability insurance policies:

Keep an eye on your policy excess. This is the amount you have to contribute towards any claim you make. Choosing a higher excess could lower the cost of your premium. Just make sure you can afford to pay it if you need to claim.
Not all policies include product liability insurance, so check the details if you need this.
If your business situation changes (eg: your company grows), be sure to update your policy so you get the extra cover you need.
Cover only lasts as long as you pay your premiums. However, it’s possible a claim could be made against you after your policy expires. In this case, you may still be able to claim on the original policy, as long as it was valid at the time of the incident.

What other types of insurance might my business need?

Some types of business insurance are needed by law, but others are optional and depend on what industry you’re in. Here are some types of business insurance you might need:

Employers’ liability insurance – you’re legally required to have this, even if you only employ one person
Professional indemnity insurance – provides cover if a client claims against you for financial losses resulting from your work. An example would be giving bad advice or losing sensitive data
Business van insurance – you’ll need this if you use a van for work purposes
Commercial property insurance – to protect your business premises
Business contents insurance – to protect your business equipment
Key person life insurance – protects your company against losing valuable employees through critical illness or even death
Business interruption insurance – could cover lost profits if your business has to close due to unforeseen circumstances.

Business insurance guides

See our guides for tradespeople, contractors and self-employed workers across different industries

Public liability insurance form for the self-employed

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Self-employed public liability insurance

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Public liability vs professional indemnity

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Business types

Tradesperson insurance

This provides specialist cover for the risks you face in your everyday work

Cover types

Small business insurance

The cover that fits best will depend on how your business operates

See our business insurance guides

FAQs

Is public liability insurance tax deductible?

Yes, public liability insurance is tax deductible.

It’s counted as an ‘allowable expense’, so make sure you keep your insurance invoices, receipts, and other documentation safe for HMRC.

What is the difference between public liability and employers’ liability insurance?

Public liability insurance covers you if a member of the public suffers injury or property damage resulting from your work.

Employers’ liability insurance covers you if a member or staff makes a claim against you for injury or illness through work.

Is public liability the same as third party?

Yes, third-party liability is just another way of describing public liability. It’s how insurance providers refer to people not involved in the insurance contract.

You are the first party and the provider is the second party. The third party is someone who might make a claim on the contract if they were injured eg: a customer, client, supplier or member of the public.

How do I get a public liability insurance certificate?

You can get your public liability insurance certificate directly from your insurance provider. Once you take out cover, they’ll usually email it to you immediately. You may also be able to download the certificate via your account online.

Unlike employers’ liability, public liability insurance isn’t a legal requirement. So, you don’t have to display proof of cover if you don’t want to.

What is personal public liability insurance?

Personal liability insurance covers claims made against you for third-party injury or property damage. Unlike public liability insurance, it covers you and your family, not your business.

Standalone personal liability policies aren’t common in the UK. This type of cover is usually included as part of other insurance packages – for example, travel insurance or home insurance.

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Reviewed 22 Jun 2026 by Amy Rootham Insurance expert

Amy helps make sure you get the best value when choosing insurance. Thanks to more than four years’ experience at Compare the Market, she understands what people look for, working closely with insurance providers to offer you deals and services that are fair, easy to understand and right for your needs.

Methodology

1 Based on the % of respondents reporting Compare the Market is their preferred brand in the last 12 months vs. other leading PCWs. Source: Savanta BrandVue Financial Services, National Representative Survey of 12,257 respondents (June 2026)