Public Liability Insurance

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    Protection if someone is injured or their property is damaged because of your business.

    • Public Liability Insurance
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    Legal fees and compensation payments if you make a mistake in your work and a client suffers a financial loss.

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    Cover for legal fees and compensation payments if you make a mistake in your work and a client suffers a financial loss.

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What our Nerds say about public liability insurance

HOLLY

INSURANCE NERD

Public liability insurance protects your business if a member of the public is injured or dies, or if their property is lost or damaged, and they hold your business responsible. This might be a customer, a supplier or a visitor.

Getting public liability cover isn’t a legal necessity, but some industry bodies expect you to have it as standard. Whether your business needs it may also depend on the type of clients and contracts you work with.

If you’re not sure how public liability insurance works or what features you might need, look no further than our guide to public liability insurance below.

What is public liability insurance?

Public liability insurance protects your business if it’s held responsible for personal injury to a member of the public, a client or other visitors, or for damage or loss to their property.

For example, it may be able to cover you if:

  • a customer slips over and injures themselves in your shop or cafe
  • a tool, ladder, or something else injures a member of the public or damages their property (such as a car or laptop) during the course of your work
  • you make a mistake in your work (such as using the wrong equipment or fitting something incorrectly), which results in further damage

The cover helps pay for any associated legal fees for defending a claim, including the cost of a solicitor, as well as compensation costs, including medical fees after injury, compensation to beneficiaries after accidental death or property repair bills after damage.

Why is public liability insurance important?

Even though public liability insurance isn’t a legal requirement, it’s still an important form of insurance for many different kinds of businesses to have. Whether you regularly have customers visit you, such as a shop or café, or you regularly work in people’s homes or in public spaces – as a window cleaner or builder, for example – there is always a risk that a member of the public or their property could be involved in an accident as a result of your work.

In an ideal world, you wouldn’t ever need to make a claim on a public liability insurance policy. However, accidents can happen, so if a member of the public gets injured or their property gets damaged and they make a claim against your business, having public liability cover will give your business some protection.

It can cover compensation costs, legal fees, and other related costs.As these costs could add up to tens of thousands of pounds or even more, depending on the incident, taking out public liability insurance can give you peace of mind that you’re covered should the worst happen.

Public liability insurance is particularly important to have if you’re a member of an industry body or you work with certain clients, as you may not be allowed to do your work without this cover.

What does public liability insurance cover?

Public liability insurance covers injury or death of members of the public, as well as loss or damage to property. This might include clients, visitors and participants in events, and even passers-by – simply put, a third party who you don’t employ.

The incident may happen on your business premises or while you operate at another site, and could be anything from a customer tripping on a café step to a loose tile falling on a pedestrian while a builder carries out work.

Some of the costs that public liability insurance can cover include:

  • Compensation if you need to pay out for any injury or damage caused to a third party, including any loss of earnings by an individual as a result of an incident.
  • Legal expenses if your business needs to go to court, for example.
  • Repairs of any property that your business is responsible for damaging.
  • Medical expenses if the NHS claims back the cost of any services or treatments it gave, for example.

Do I need public liability insurance?

Public liability cover is for all types of sectors and businesses of all sizes. Accidents happen, and whether you work from home and have clients visiting, sell in public spaces, exhibit at conferences or carry out a trade in customers’ homes, your business will face certain risks if it comes into contact with the public.

Whilst it’s not usually a legal requirement, having cover in place means the reassurance of knowing that if your business is held responsible for injury or property damage, you have protection from legal fees and compensation costs.

When should I get public liability cover?

Businesses that come into contact with members of the public and their property may decide that public liability insurance is worth getting.

If this applies to your business, then there is no reason to delay getting this insurance. An accident can happen at any time, so it’s best to get covered as soon as possible to make sure you’re protected.

In some cases, you will need public liability insurance before you can start working with a client or at an event. Check the terms of your contract to see if you need a particular level of cover.

You can take out public liability insurance as a standalone policy or, more typically, as part of a package with other business insurance policies.

» COMPARE: Business insurance quotes

How much public liability cover will I need?

Your level of cover will determine the maximum amount your insurer would pay out for a claim. How much cover is right for your business depends on a few factors, including:

  • your type of business and the risks associated with its activities
  • how often you deal with the general public
  • any requirements of membership of trade bodies, your industry or your clients

For example, government contracts tend to require a minimum level of public liability cover of between £5 million and £10 million.

You can usually find public liability cover between £1 million and £10 million. This may sound a lot, and not all businesses will need the maximum amount. But it’s important to consider all possibilities, and how compensation and legal costs can mount up, so you don’t find yourself underinsured and footing the bill for expensive claims.

Check client contract terms and guidelines of any trade associations or membership bodies you belong to, for any minimum cover requirements.

It’s possible to take out public liability insurance for a short period, even for just one day, if that works better for your business. For example, you may want cover solely for the days you sell at a market or work at an event.

How much does public liability insurance cost?

The cost of cover will depend on a few factors relating to your business, including:

  • how many people you employ
  • your sector or trade
  • your business’s claims history
  • the level of cover
  • the excess amount you choose

As there are lots of factors that go into the price your insurer charges, it’s best to get a quote and compare the premiums along with the level of cover you’d like, based on your business and its individual circumstances.

When you are comparing providers it isn’t just about the lowest price, though premiums will need to be affordable. Check that the level of cover and maximum cover amount are right for your business. When you choose an excess (the amount you pay towards a claim), make sure you can afford to pay it if you have to make a claim.

It’s also key to read the full details of the cover, so you are clear about when the insurer would and wouldn’t pay out. You may also want to consider other factors, such as if the provider charges admin fees if you make a change to your policy.

How do I get public liability insurance

You can buy public liability cover directly from a provider or through a broker. You’ll save time and effort if you’re looking to compare deals using a price comparison tool, as you’ll only need to provide the information once to get quotes from a number of insurers.

To get a quote, you will need to supply some personal information, including your name and address, and information about your business. This will usually include:

  • trade or sector
  • number of years trading
  • number of employees
  • annual turnover or income
  • details of past claims
  • cover start date

You may also be asked if you want to add other types of cover, such as professional indemnity or product liability, as a business insurance bundle.

You can then review the quotes and choose the provider that offers what your business needs, for the best price.

» COMPARE: Public liability insurance quote

Public liability insurance FAQs

What other types of business insurance might my business need?

If your business has employees, you legally need to have employers’ liability insurance (with a few exceptions).

You will also need commercial vehicle insurance if you use a car, van, or other vehicle as the main part of your business activities – for example if you run a haulage company or have a fleet of taxis. Alternatively, you may need business vehicle insurance if you drive a car for work, but it’s not the business’s main activity.

Other than that, your business may want to consider taking out professional indemnity insurance. Some industry bodies require businesses to have this insurance to be able to work in their sector – accountants and solicitors, for example – so it’s worth checking whether this applies to you.

If your business makes, supplies, sells or repairs products, or even hands out samples for free, then product liability insurance may be worth getting to cover any faults or problems that may occur with items associated with your business.

To cover the contents of your business, including stock and equipment, you could take out business contents insurance.

There are many more types of business insurance that may be suitable for your business, such as business interruption insurance and cyber insurance.

Is public liability insurance a legal requirement in the UK?

Public liability insurance isn’t a legal requirement, unless you own a horse-riding business. You will also need this cover if you bid for government contracts, and some clients and membership bodies may ask that you have a minimum level of cover.

Even if the above does not apply to you, it doesn’t mean you shouldn't get it.

Any business that comes into contact with the public should consider the benefits of getting cover, as it offers protection for legal and compensation costs after injury to a member of the public, or damage to their property, caused by your business.

What happens if I have no public liability insurance?

Without cover, if a member of the public has an accident or their property is lost or damaged on your premises or off site, and your business is held responsible, your business would be liable to pay legal fees and compensation costs.

This may include medical bills, loss of earnings, damage repair bills and solicitor costs, or compensation to their beneficiaries after an accidental death. So while it’s not compulsory cover, consider that these costs could be extremely high. And for some types of work, not having cover may exclude you from bidding for contracts or taking part in off-site events.

Is public liability insurance tax deductible?

Public liability insurance, and other business insurance policies, are classed as allowable expenses. This means the cost of these policies are tax deductible.

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

While they are both types of business insurance, public liability insurance is not generally compulsory, while employers’ liability insurance is a legal requirement if your business has employees with a few exceptions. The penalty for not having employers’ liability insurance is £2,500 a day.

Public liability insurance covers legal and compensation costs if a member of the public, a client or visitor is injured or killed, or their property is lost or damaged, and your business is responsible. Employers’ liability insurance protects your business if one of your employees is ill or injured while at work and claims compensation.

Does public liability insurance cover the actions of my employees?

If an employee is responsible for an injury to an individual or loss or damage to someone’s property during the course of their work, your business’s public liability insurance should cover this.

However, public liability insurance doesn’t cover you if your employee gets ill or injured during the course of their work and they try to make a claim. To get cover for this, you would need employers’ liability insurance.

Does every business need public liability insurance?

Technically no, as public liability insurance isn’t required by law. However, as most businesses will have some form of contact with clients, customers, and members of the public, including their property, it is a policy that many businesses could benefit from.

» MORE: Do I need business insurance?

Do I need public liability cover if I’m self-employed?

If you run your own business as a sole trader or freelancer, it could make sense to consider public liability insurance if you come into contact with the public. Perhaps clients visit your home, or you exhibit or sell at public events. Or maybe you provide a service to clients in their home.

If your business causes injury or even death, or is responsible for loss or damage to their property, you could face compensation claims and legal costs. With public liability insurance, these costs would be covered, up to a maximum amount.

Can I get public liability insurance for one day?

Yes, it’s possible to arrange public liability cover that only lasts a day for one-off events. This might be if your business runs or attends events such as f?tes or client dinners only occasionally.

Is there anything public liability insurance doesn’t cover?

Public liability insurance won’t cover you or your employees if you suffer from an injury or illness as a result of your work. Only employers’ liability insurance covers any claims made by your employees.

It also won’t cover the cost of repairing any damage you cause to your own property. If you want cover for your own property, such as stock or equipment, you would need to have business contents insurance. cover.

Can I get public liability insurance as part of my business insurance?

Yes, insurers offer packaged business insurance deals. Public liability insurance is only one type of insurance cover your business might need. If you have one or more employees, you will likely need employers’ liability insurance. Other types of cover this might be bundled with are professional indemnity insurance, commercial property insurance and product liability insurance. Always read your policy in detail, so you know you have the level of cover your business needs.

How do I claim against public liability insurance?

As soon as a claim has been made against your business, or even if you’re aware of injury or damage, which has happened but no claim has yet been made, you should follow the steps advised by your insurer. This includes not negotiating with the injured party and contacting your insurance provider as soon as possible. Have your policy details ready when you contact your insurer.

Bear in mind that if you are making a claim for an amount below your agreed excess, you won’t be able to make a claim against your policy and will need to pay the bill yourself.

About the author

Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more

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