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A Guide to Public Liability Insurance

If you own or run a business of any size, public liability insurance is a must. It serves to protect you and your business against any claims for accidental damage caused to property or an individual (including death) whilst at your premises or as a result of your business activities.

How does it work?

The best way to explain this is to use an example. Imagine you are the owner of a small shop. One of your employees plugs in a vacuum cleaner and runs the cable along the floor, over to the carpet in the corner. A customer walks into the shop, trips over the cable and breaks their ankle. In this instance, the injured customer would be within their rights to sue the shop because the accident was caused as a direct result of business activities and/or negligence on the employee’s behalf.

However, if the shop owner has adequate public liability insurance, any legal fees, NHS medical costs and compensation payments arising from the claim would be covered by the insurance company. Without this cover the business would be expected to pay out the whole claim, sometimes amounting to tens of thousands of pounds; enough to have a disastrous effect on a small company.

How much cover do I need?

Of course, this is just a basic example to illustrate how public liability insurance works. What you need to think about is how much cover you’re likely to need. Most insurance companies offer cover from £1million. This may sound a lot, but if your business operates in a high risk industry, you may require more cover. Public liability cover for small to medium enterprises (SME’s) usually has a maximum limit of £10million. Consider your limit carefully as being under-insured can sometimes be as detrimental as being un-insured.

You may also find that some of your contracts stipulate a minimum cover level in this area. This is especially common when working with a local authority and you will usually need cover of at least £5million to satisfy their terms and conditions.

Who needs public liability insurance?

Businesses most at risk from public liability claims are those who have visiting clients or suppliers, even if the business is run from home. If you will be working at a customer's property or premises, you will also be liable for any damage or injury arising as a result of your work for them. Having a public liability policy in place is not a legal requirement per se, but certain professions will need to have one in order to trade.

If you own a shop, pub or office, work in the plumbing trade or any of the other trades which require you to enter a customer's premises, then you should seriously consider taking out public liability insurance to make sure you are covered in the event of a claim. If you want to find out more about a business insurance policy specifically tailored for tradesmen, then visit our tradesman insurance page, likewise, you can find our self employed public liability insurance page here.

Sometimes, no matter how hard we try, accidents are unavoidable so it’s imperative you take out adequate cover. Many small businesses would find it difficult to foot the bill for expensive legal costs and compensation payments arising from an accident or damage to a customer's property, so purchasing a comprehensive business insurance policy can really be a lifeline.

How do I choose the right policy?

You need to consider what the risks are when comparing public liability insurance quotes. Generally, those businesses which need a higher level of cover are those who occupy a premises and have high number of third party individuals (the public) frequenting at their leisure, e.g. shops, pubs, clubs, theatres, etc. Other high risk businesses include those working with chemicals and powerful machinery or owning premises where alcohol is consumed.

On the other hand, if you work from your office at home and your clients only visit you infrequently, then you should consider a lower level of cover. Ultimately the decision is yours but it should be considered carefully.

What does public liability insurance not cover?

Public liability cover does not cover accidents which happen to you, your own property or any employees. This is covered by your over arching business insurance policy.

It is also important to remember that you are required by law to have employers' liability insurance in place if you have 1 or more members of staff in your employment (this may not apply if you employ members of your family).

What factors affect public liability insurance costs?

Put simply, the price of your annual premium is normally calculated using several factors; the risk you present to the insurer, the size of your business and the level of cover that you require.

Depending on your profession you could be seen as a higher risk to the insurer, for example; a small business owner working from home, who rarely receives 3rd parties at the property, would be a much lower risk than a plumber who regularly enters the home of their clients and carries out remedial work so their public liability cover would be priced accordingly.

How do I take out public liability insurance?

Moneysupermarket has teamed up with Simply Business to help you compare online business insurance quotes from a range of insurers. You only need to submit your details once and we’ll do the hard work for you! Each quote is specifically tailored to you and your circumstances and because we compare a number of different insurers you can be sure of a competitive price. You can choose whether to buy online or by phone; alternatively if you need any help during the quote process, please give our helpful team a call on 0845 072 3345.

To begin searching for cheap public liability insurance now, please hit the "get a new quote now" button above.

Further Reading

To find out more about public liability insurance, get the answers to your frequently asked questions, or simply to demystify the jargon used in the business insurance industry, please visit one of the pages below.

Find and compare a public liability insurance policy for your business

Whether you are self-employed, own a small business, or have a larger business with a number of employees, we can help you to find public liability cover and a comprehensive business insurance policy to meet your individual requirements.

To find out more about business insurance and public liability cover for your business type or profession, please click on one of the links below.