Public liability insurance gives financial protection to your business from compensation claims if you are sued by a member of the public for causing an injury, or damage to their property. It also covers any legal fees incurred in defending claims, as well as paying out the compensation if your company is found to be responsible.

Public liability insurance protects your business from compensation claims. This could be for causing an injury or damage to their property. It also covers any legal fees and paying out compensation if your company is responsible.

What does public liability insurance cover?

Type Example
Injury Someone trips over business equipment
Illness A customer gets food poisoning from a restaurant
Death Faulty electrics lead to a fire and a fatality

How much does public liability insurance cost?

The level of cover you need and how much it costs depends on your business risks. The cost of these premiums will depend on the:

  • Nature of your business

  • Turnover

  • Number of employees

  • Areas you would want to cover

  • The associated risk

  • Previous claims

  • Health and safety record

If you are unsure what cover your business needs, speak to an insurance broker who can offer you advice on finding the best insurance.

How much does public liability insurance cost?

Public liability insurance is not a legal requirement but it’s good to have if you own a business. Without it, it can be difficult to do business in some industries.

Many clients may want you to have the lowest cover in place before they hire you for a project. This is important to do business in the public sector.

If you don’t have public liability insurance the NHS might want you to cover the cost of medical bills for anyone injured on your premises or while working for you.

Tips for getting cheap liability insurance

Although there's no sure way of getting cheap liability insurance, there are a few things you can do to get a better deal.

  • Shop around and compare quotes

  • Only get the cover you need

  • If possible, choose a higher excess

  • Shop around and compare quotes

  • Get employer's insurance and liability insurance in one policy.

How to compare public liability insurance quotes

Get as many quotes online as possible, then you can compare:

  • Liability limits: This is how much your insurer will pay if you claim. You can choose a maximum limit between £1 million and £5 million, based on the type of business you run. E.g. a construction company may need a higher level of cover than a tutor.

  • Other cover options: Most insurers offer public liability as part of a business insurance policy. You can cover stock and equipment, business interruption, and employers' liability. Here is how to choose what business insurance you need.

  • Cost: Compare quotes from different insurers before you take out cover, to get the cover you need at the cheapest price. You can save money on your premium by choosing a high voluntary excess, or paying up front in full.

If you are unsure what cover your business needs, speak to an insurance broker who can offer you advice on finding the best insurance.

Choosing the best public liability insurance for your business

When it comes to liability insurance, the best policy isn’t always the cheapest. The wrong cover could put your business at risk of bankruptcy if someone makes a claim against you.

How much public liability insurance do I need

A standard public liability insurance policy typically provides cover ranging from £1 million to £5 million.

Some businesses have higher risks or have government contracts, so you need to think about a higher limit, such as £10 million.

In some trades, you need proof of adequate public liability insurance cover before getting the job.

Businesses in the construction field make it a condition that you have cover up to a specific limit. The limit can vary from business to business.

Types of public liability insurance

There are several different types of public liability insurance policies which are tailored for specific circumstances. These include:

Limited company public insurance

Limited company public liability insurance is for people who own limited liability companies. It also protects your business from any claims from accidental damage.

Small business public liability insurance

If you run a small business that deals with lots of clients and suppliers, you will need public liability cover. This also includes businesses that work at clients’ homes, where you can be held liable for any injury or damage from working for them.

Landlord public liability insurance

As a landlord, it’s your responsibility to make sure your tenants are safe on your property. If a tenant is injured because of loose carpet, they can file a claim even if you weren’t made aware of the problem.

This is where landlord public liability insurance cover can protect you from anything you could be personally and financially liable for. This cover will also protect anyone visiting the property.

Self employed public liability insurance

This is for those who are sole traders or self employed. While being your own boss has it’s advantages, it also means you’re responsible for anything that goes wrong.

Accidents happen and they can put your business at risk. Self employed public liability insurance ensures you’re protected if a customer, supplier or member of the public suffers an injury or has property damage from your business.

Personal public liability insurance for individuals

Personal liability insurance covers you if you are accused of putting someone’s health or property at risk.

A neighbour can claim if they slip on your front yard and injure their back. You would be responsible because you didn’t keep the area was safe.

You may already be covered by another insurance package, so be sure you explore this before taking out liability insurance.

What is the difference between public liability and third party indemnity

Third party indemnity insurance is usually to protect you from professional negligence, whereas public liability protects against loss, injury or damage to the general public.

Indemnity is a contractual obligation of one party to compensate the loss incurred to the other party due to the acts of the indemnitor or any other party.

For example, if you had a rug and someone tripped and broke their arm, you would be covered by public liability insurance.

But, if you advised a client to put a clause in a contract and it turned out you were wrong and caused them a financial loss, the client could make a claim against your indemnity insurance.

How to make a claim on your public liability insurance

If you make a claim on your public liability insurance, here are some things you should consider:

  • Look through your policy documents to make sure you’re covered.

  • Do everything you can to prevent a situation from getting worse. If a customer or member of the public is injured, call an ambulance immediately. If there is damage to property, try to minimise it.

  • Don’t admit to liability for any situation or offer to pay compensation without consulting your insurance company and lawyer.

  • If a solicitor contacts you with a summons or notice of prosecution, tell your insurance company straight away. A notice of prosecution is simply a notice from the Police that an offence has been recorded and that they intend to prosecute the person responsible

  • Make sure the same accident doesn’t happen again. Regular risk assessments and keeping employees up-to-date will keep on top of this.

How to claim on someone else's public liability insurance

If you want to make a public liability compensation claim, you will need to prove that another party was responsible for your injury.

To help strengthen your personal injury claim, you should:

  • Report the accident immediately

  • Make a note in the accident book if possible

  • Take names and addresses of witnesses and take photographs of the area where it happened.

Legal costs, prescriptions and travelling are expensive. If you claim these as expenses in your claim, remember to keep receipts as evidence.