Public liability insurance covers the cost of claims made by members of the public, or other third parties, who suffer injury or property damage connected to your business. If a customer trips over your equipment, a visitor is hurt on your premises, or you damage a client’s property while working, public liability responds to the compensation and the legal costs. It is not compulsory in law, but many businesses cannot win contracts or operate without it.
Public liability is one of the most widely held commercial covers in the UK, precisely because the exposure is so broad: almost any business that deals with the public, works on client sites, or invites people onto its premises can face a claim.
What does public liability insurance cover?
It covers third-party bodily injury and third-party property damage arising from your business activities, together with the legal costs of defending a claim and any compensation awarded. Typical examples are a member of the public injured by your work, a customer whose property you damage, or someone hurt on premises you control. The cover is for harm to people and property outside your business, not to your own staff or your own property.
What is not covered by public liability?
Public liability does not cover injuries to your own employees, which is the role of employers’ liability insurance, nor claims that your professional advice or service was negligent, which is the role of professional indemnity insurance. It also does not cover damage to your own premises, stock or tools; those sit under commercial property or contents cover.
Is public liability insurance a legal requirement?
No. Unlike employers’ liability, there is no law requiring public liability cover. In practice it is often unavoidable: commercial landlords, event venues, local authorities and larger clients frequently make it a contractual condition, and trade bodies may require it for membership. Many businesses treat it as essential even where no contract demands it, because a single third-party injury claim can run to a substantial sum.
How much public liability cover do I need?
Cover is written to a limit of indemnity, commonly 1 million, 2 million, 5 million pounds or more per claim. The right level depends on your activities and, often, on what your contracts specify: public sector and large corporate contracts frequently require a minimum of 5 million or 10 million pounds. The limit should reflect the worst realistic claim, not the typical one.
Who needs public liability insurance?
Any business whose work brings it into contact with the public or with third-party property: tradespeople, shops, hospitality, contractors, consultants who visit client sites, event organisers and many others. If a member of the public could plausibly be injured, or their property damaged, by what you do, the exposure exists.
Getting the cover right
Public liability is usually one part of a wider commercial package, and the right limit and combination depends on your trade, your premises and your contracts. A broker can make sure the limit matches your contractual obligations and that the covers around it, such as employers’ liability and professional indemnity, close the gaps public liability leaves. To review your commercial cover, get a quote or speak to the team.