How much public liability insurance do I need?
Public liability insurance covers business owners if a third party sues them. It’ll cover the legal fees along with other costs such as compensation fees if a person is injured or dies and makes a claim against them.
Key takeaways
Public liability insurance protects your business if a claim is made against you by a member of the public
You may need public liability insurance if your business brings you into contact with people who aren’t your direct employees
The amount of public liability insurance you need depends on the needs of your business, but a good policy should cover you for at least £1million
What is public liability insurance?
Public liability insurance covers you if a claim is made against you by a member of the public in relation to your business activities. It covers the legal fees along with other costs such as compensation if a person is injured or dies, or if property is damaged.
How does public liability insurance work?
Public liability insurance is popular type of commercial cover and can be tailored to your own unique requirements. There are many policies to choose from, so it’s important to buy one that suits your business.
If a claim is made against you by a third party, you can use the insurance to cover your costs instead of paying them yourself.
How much public liability insurance do I need?
Because claims against businesses can run into the hundreds of thousands, or even millions, of pounds, a good public liability insurance policy should cover you for at least £1million. This might seem like a lot, but it’s important not to be underinsured. If your insurance doesn’t meet your costs, you’ll have to pay the difference yourself.
You choose the amount of public liability insurance you need when you buy a new policy. When getting a quote through Money Supermarket, you’ll have the option of £1million, £2million, £5million, or £10million.
To work out how much cover you need, it’s important to weigh up the risks your business faces. Riskier businesses like construction where accidents might happen, or law where there is a danger of being sued, might need higher levels of cover. Sole traders who work from home and have little interaction with the public may need less.
What’s does public liability insurance cover?
Most public liability insurance policies will cover:
The cost for compensation if someone is injured
The cost of loss or damage to someone else’s property
The cost of legal expenses if a claim is made against you
The cost of compensation if someone dies
Loss of income if someone is out of work as a result of injury
It covers anyone who you are interacting with as part of your businesses, including customers, clients, and anyone taking part in or watching an event or activity you have planned.
What’s not covered by public liability insurance?
There are some things that are not covered by public liability insurance. This includes:
Anyone employed by your business, including yourself, temporary staff, students and anyone on a work placement. You’ll need employers' liability insurance to protect your employees.
Your property. You need commercial buildings insurance and commercial contents insurance to cover your business premises.
Financial loss caused through a mistake in professional advice. You need professional indemnity insurance to cover this.
Intentional harm or damage. This is not covered by public liability insurance.
Does my business need public liability insurance?
You may need cover if your business brings you into contact with other people who aren’t your direct employees. We have a complete guide to who needs public liability insurance to help you decide.
Any type of business might need public liability insurance. Here are a few scenarios where this type of cover can be useful:
If you own a physical premises where you receive customers, such as shops, restaurants, cafés, hairdressers, pubs, and venues
If you do your work in other people’s properties – for instance, you could be a plumber or electrician
If your business is based in an office, factory, or workshop where clients, contractors or customers might visit you
If you’re a contractor whose clients might insist you’re fully insured before they’ll agree to work with you
If you’re part of trade associations that has a minimum level of public liability cover for all their members.
How much is public liability insurance for a business?
The price of public liability insurance varies, depending on a number of factors. Insurers will take into account business type, size, risk level, claims history, and desired cover level to give a quote.
The price of your premiums will be more if you choose more cover, but it’s important to make sure you have enough cover if a claim were to be made against you.
It’s worth comparing public liability insurance deals to find the best offer, and to make sure your business has the right protection.
Is public liability insurance a legal requirement?
Public liability insurance is not a legal requirement, but it’s an important policy to have and can save you a lot of money if you do end up in court. Getting insured could also open up your business to more clients and allow you to join trade societies.
What happens if I don’t have public liability insurance?
Without public liability insurance, you run the risk of losing serious amounts of money. If someone files a claim against you and you don’t have insurance, you’ll have to pay for a solicitor out of the company funds, or even your own pocket.
