Public Liability: FAQs

Q. What is public liability insurance and what does it cover?

A. Public liability insurance protects businesses against claims of personal injury or property damage that the public suffer as a result of business activities. It typically covers the cost of legal proceedings and any compensation claims for injuries to a third party or damage to their property, allegedly caused by your operations.

This insurance usually wouldn’t cover accidents that happen to you or your employees, damage to your own property, professional negligence, or intentional acts of harm or negligence.

Q. Who needs public liability insurance?

A. Public liability insurance is crucial for any business that interacts directly with customers, works in public spaces, or handles client property. This includes tradespeople, shop owners, restaurant operators, and event organisers, among others.

If you operate your business from home and occasionally have clients visit, or if you handle their goods, it is wise to have public liability insurance to protect against potential claims.

Q. Can I work without public liability insurance?

A. While not legally required in the UK, public liability insurance is highly recommended for most businesses. Some clients might even ask that you purchase it before they hire you.

Q. How much public liability insurance should I get?

A. The amount of cover you need depends on your specific business risks, the industry you operate in, and the environments in which you work. Common coverage levels range from £1 million to £5 million, but businesses in higher-risk industries or those working with large clients may need more.

Q. What’s the difference between public liability insurance and professional indemnity insurance?

A. Public liability insurance covers bodily injury and property damage claims made by members of the public due to your business activities.

Professional indemnity insurance, on the other hand, covers claims made against you as a result of professional errors you have made, or advice that leads to a client’s financial loss.