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 property 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 compensation costs for repairs. This could also include product liability, after you, or your business, provides or installs a defective product which causes damage.
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 for a business owner (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.
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. 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. 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.
From construction sites to cocktail bars, and finance to food, you can find insurance that’s specially designed for over 1,000 types of business. We’ve teamed up with Simply Business to offer you tailored quotes from leading busines insurance providers.
What types of business can public liability insurance cover?
Types of business/profession/traders 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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How much does public liability insurance cost?
Size of your business
The price will be determined by the size of your business
Type of your business
Manual businesses generally pay more than clerical ones, because there’s a higher risk of damage and injury
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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Business insurance policies
Business insurance covers a wide range of things. Which of them you’ll need will depend on the type of business you run, along with how large it is. Some, like employers’ liability insurance, can be legal requirements, while others, such as a public liability insurance policy, are more of a grey area. While they’re not all legal requirements, you might find that it’s easier to operate as a company with business insurance, as other businesses may want you to have cover in place, before they work with you.
So, while it can vary from business to business, a business insurance policy of any sort is basically designed to offer protection against claims made against you. These could be from the public, customers or employees. They all cover slightly different things, so it’s important that you know which could be useful for your business.
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 else do I need to know about public liability insurance?
A few extra things to know about a public liability insurance policy:
- Keep an eye on your policy excess. An excess will mean that any claim you make on your public liability insurance won’t cover the full amount you need.
- If your business situation changes (e.g. you’ve grown in size), make sure that you update your policy to get the extra cover you need.
- Make sure, if you have other members of staff, that you also have employers’ liability insurance. It’s a legal requirement anyway, but your public liability insurance won’t be valid for claims made against you by one of your employees, if they are injured or ill because of the work they do for you, without that extra cover in place.
- Cover only lasts as long as you pay your premiums.
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.