What Is Public Liability Insurance?

Public liability insurance is designed to cover the cost of compensation claims made by third parties for injury, illness, or property damage caused by your business. It can also include associated legal costs, which could otherwise pose a serious financial risk.

This type of cover may apply whether you operate from premises, visit client sites, or work in public spaces.

Who Might Need Public Liability Insurance?

Any business that interacts with the public could benefit from public liability insurance. This includes:

• Tradespeople (plumbers, electricians, builders)
• Retailers and shop owners
• Market traders and stallholders
• Hairdressers and beauty therapists
• Event organisers and contractors
• Cleaners and gardeners
• Freelancers and consultants who visit client premises

Some clients, landlords or local authorities may require proof of public liability cover before you can start work.

How Much Public Liability Cover Do I Need?

The amount of cover your business might need depends on the level of risk associated with your work, and the type of clients you serve. Common cover limits include:

• £1 million – suitable for small businesses or sole traders
• £2 million to £5 million – typical for trades and professional services
• £10 million or more – may be required for high-profile contracts, public sector work or large-scale projects

It’s worth considering the potential cost of compensation claims when deciding on your level of protection

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What Does Public Liability Insurance Cover?

A public liability policy can typically include protection against:

• Injury to third parties – If someone is hurt as a result of your business activities, for example, slipping on a wet floor in your premises.
• Damage to third-party property – For instance, if you accidentally damage a client’s furniture while working on-site.
• Legal fees and defence costs – Covering the cost of legal representation and compensation if your business is taken to court.
• Medical expenses and compensation payouts – For claims involving hospital treatment, rehabilitation, or time off work.

Public liability insurance usually covers incidents that occur:

• On your business premises
• At a client’s site
• In public locations (e.g., markets, exhibitions, festivals)

What Isn’t Covered by Public Liability Insurance?

While this type of insurance can provide essential protection, it does not typically cover:

• Injury to employees (this is covered by employers’ liability insurance)
• Professional negligence (for this, you may need professional indemnity insurance)
• Damage to your own property or tools
• Work conducted outside agreed geographical limits (e.g., outside the UK)
• Deliberate acts of harm or negligence

A tailored policy can help ensure you have the right combination of covers in place.