Public liability is a type of business insurance. It helps protect you from compensation claims, and legal costs, if you injure a third party (including death) or damage their property.
You’re covered whether you’re at your premises or working off-site. You'd have to be found legally responsible to be liable for the costs, and for your insurance to help cover the bill.
The cost of a public liability policy depends on the size and type of your business, and how risky the work is.
The type of business you run, and how much risk you pose to the general public make a difference. You’ll usually pay more if you have a manual-labour business, rather than a clerical one, or if you’ve made any previous claims.
How much public liability cover will I need?
It depends on the risks involved with your business. If it’s high risk, or involved with government contracts, you might want to look towards the higher-end limit - around £10 million.
Minimum cover levels start at around £2 million, more suitable for businesses that have little to do with the public.
It’s not a legal requirement for your business to have it, but a client or customer might request to see proof that you have it before they’ll work with you.
Here’s a few examples of businesses that might need public liability cover, and scenarios where it could help.
Restaurateurs, shop, pub or office owners might also want to consider taking out public liability insurance, as well as the self-employed.
If your company is contracted to clean an office, and a member of the public’s property is accidentally damaged.
Your business is in charge of providing a wedding buffet, and a guest claims they have food poisoning.
A bucket of water tips over a few stories above a busy street, damaging a passer-by’s clothes and phone.
Public liability cover can be useful if scaffolding collapses and damages a vehicle.
You’re just about to put a ‘wet floor’ sign up when an unsuspecting member of the public slips and injures themselves.
While you have to comply with regulatory rules to prevent electrical shocks and fire, accidents can still happen.
A client is visiting your workshop and trips over a stray cable.
You’ll need to provide some basic information about your business, including:
Combine cover for hassle-free insurance
You can combine public liability insurance with employers’ liability insurance – sometimes it works out cheaper, and it's usually simpler than arranging each policy separately
Your public liability insurance is classed as an ‘allowable expense’ by HMRC which means you can offset it against your profits when you’re doing your tax returns.
You’ll need to keep a record of the expense if you want to offset it against your tax, and it’s usually best to get an accountant to help you with your tax returns - unless you have a very straightforward business.
Public liability insurance won’t cover employees, temporary staff, students or interns working with you – it just covers compensation claims made by third parties. That could be a general member of the public, clients or suppliers.
You’ll need employers’ liability insurance to properly protect yourself and your staff. It’s also a legal requirement
Legally, it’s not a must. But if you’re self-employed, and your business interacts with the general public a lot, you should consider it.
Compensation claims can easily run into the thousands, and not being able to pay these yourself could run your business into the ground.