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What does public liability insurance cover?

Find out what your protected and what's not covered

published: 08 June 2022
Read time: 5 minutes

Public liability keeps you protected against claims from members of the public. Our guide explains what’s included in your public liability insurance – and what isn’t

What does public liability insurance cover?

Running a business is never without its risks – and public liability insurance helps protect you against some of them. It’s a type of business insurance designed to keep your bottom line safe in case your business harms a member of the public and they make a claim against you.  

You can find out more about how public liability works – but how much protection does public liability insurance give you? What kind of accidents does it cover, and which expenses will it pay out for? Our guide gives you the facts on what public liability insurance does and doesn’t cover, so you can make sure you pick the best policy for your business.

Young male student studying in a cafe

What kinds of incidents are covered?

Your public liability insurance will cover just about every type of incident that could lead to someone else being harmed. It includes everything from small accidents that damage someone’s property, to serious incidents in which your business activities accidentally lead to an injury or death.

Everyone tries to make their business as safe as possible – but no matter what line of work you’re in, there’s always the chance that something could go wrong. Here are a few types of incident that a good public liability insurance policy will include:

  • Damage to property. This can be small – for instance, you might accidentally spill coffee over someone’s laptop and cause them to lose data. Or it can be large – if you’re a plumber working in a flat, a mistake could cause serious water damage to the property below. Either way, insurance will cover you against any claims. 

  • Personal injury. If your business includes a shop or office, it’s possible a customer might trip and fall while on your premises. If your company is involved in construction, there’s always the risk of falling objects injuring someone. You could be asked to cover medical bills for the person affected – but with cover, your insurer will pay out for any claims.

  • Illness. There are plenty of situations in which a business’s activities could accidentally make people sick – for instance, if you run a restaurant or pub, or if you work with dangerous chemicals. 

  • Death. If the work you do accidentally causes someone else’s death, your insurer will protect your bottom line if you’re taken to court for compensation.

However, there are a few types of incident that aren’t covered by public liability insurance. If your insurer decides that the harm was caused deliberately, or that it happened because of negligence on your part, your insurance might be invalidated. Similarly, if a member of the public was hurt because you or one of your employees was under the influence of drugs or alcohol on the job, your provider might refuse to pay out.  

What expenses and costs does public liability insurance cover?

If a claim is made against you by a member of the public, you can face some hefty costs. Luckily, your public liability insurance will be on hand to cover all of them.

Someone might sue you for the cost of repairing or replacing their property if it’s damaged. If you cause an injury, the court could decide that you need to pay damages to cover medical bills or any income they’ve lost while being treated. Plus, there are solicitors’ fees to think about – defending yourself in court can be expensive, and if you lose the case you could be asked to pay the other person’s fees as well. All these costs can run into the millions, but your insurance will have you covered. Just make sure you have the right level of public liability insurance to cover any likely claim. 

Just remember that all insurance comes with an excess – that’s the amount you must pay yourself whenever you make a claim on a cover. Say you have an excess of £350 and you must pay damages of £10,000: if you have enough cover, you only have to pay the first £350 yourself – your insurer will pay out for the remaining £9,650.   

Does public liability insurance cover legal fees?

Yes, your public liability insurance will cover legal fees. That includes the cost of hiring a lawyer for yourself, plus any extra fees the court orders you to pay. For instance, you might have to pay for the other side’s legal fees or pay damages if you’re found to be at fault. 

Does public liability cover loss of income?

A good public liability insurance policy should cover loss of income. If your business injures someone and they’re laid up for a while, they could lose their ordinary income while they’re recovering. Or if someone is permanently disabled, they might not be able to return to their previous job. In those cases, they might decide to make a claim against you for the income they would have received if the accident hadn’t taken place. Your insurance will cover the payout if you have enough cover.

What is not covered by public liability?

Public liability insurance doesn’t protect you against claims from everyone – only members of the public. If there’s an accident at work, it’s also possible that one of your employees could be harmed. This is covered by employers’ liability insurance – and the law says that if you have anyone working for you who isn’t a direct relative, you must have insurers’ liability in place.

Similarly, public liability won’t pay out if you yourself are injured. It also doesn’t protect you against any damage to property owned by you or your business – although there are plenty of other kinds of business insurance that can help.

How much public liability insurance do I need?

When you take out public liability insurance, you can choose how much cover you want. Insurance usually starts at £1 million and can protect you for up to £10 million or more. That might sound like a lot, but you may need it – for serious accidents, compensation claims can very easily run into the millions.

To work out how much cover you need, it’s worth thinking about how much of a potential risk is posed by your business. If you work from home and rarely interact with members of the public, it’s likely you won’t need the higher levels of cover. But if you work in a riskier business, like construction, it’s worth getting more. It might be useful to see how much cover similar businesses in your field are getting. Trade associations might also have guidelines to help businesses choose the right amount. 

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