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What is public liability insurance?

Updated: Feb 16, 2021

Public liability insurance covers you if a customer or member of the public makes a claim against your business relating to injury or property damage.

Public Liability explained:

Public liability insurance is there in case you find yourself on the end of a compensation claim. If someone is injured, or their property is damaged, and you are found legally liable for it, public liability provides the cover your business needs to resolve a claim.

You may need it even if you work from home – if a client or delivery person falls down the stairs due to a loose handrail, for example.

What does it cover?

A Public Liability policy insures you for a range of accidents. It could be something very serious, like the home owner getting hurt by tripping over your tools while you're building their conservatory, or something as simple as spilling coffee on a client laptop during a meeting. It's worth noting that some businesses – if you work in the public sector for example – will often be required to take out a minimum of £5 million worth of cover to be considered for a contract.

You can also choose to add elements like employers' liability insurance and cover for subcontractors, tools and equipment.

Who needs public liability insurance?

Every business could face a compensation claim, so every business could benefit from public liability cover. Even if you run a small business, or you're a sole trader working from home, going without public liability could have a significant impact on your business' financial health.

For example, if you're a retailer exhibiting at an event and you damage the floor when dragging your clothes rail across the room, or you're a caterer and you accidentally pour hot soup on a member of the public, public liability would cover you.

Without public liability insurance, settling a claim could cost you thousands – and it would come directly from your business. So, it's important to make sure that you're covered.

Why do I need public liability cover for my business?

When accidents happen, you want to put right what's gone wrong as quickly as possible. That's why public liability cover is so important. It helps you keep your business running without the extra worry of a compensation claim or legal fees.

Is it a legal requirement?

It's not a legal requirement to take out public liability insurance. However, considering the financial damage a claim could do to your business, it really should be seen as an essential business expense.

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