If your business involves interaction with members of the public who aren't your employees, there's a good chance you'll need public liability insurance.
Public liability insurance would cover you if someone made a claim against your business:
loss of or damage to property
It covers you for any visitor or person who isn't an employee, including clients and contractors.
Public liability insurance can protect your business against damage claims by third parties, which could run into tens of thousands of pounds and could even bankrupt your business.
Public liability insurance covers legal and compensation costs - due to your business causing injury or property damage to a third party.
Although you don't legally have to buy public indemnity insurance if you run a business, it can be a good insurance policy to have. Some clients may ask for proof of insurance before they work with you.
In addition, you may need public indemnity insurance if you're a member of a trade association or professional body, which requires you to have it.
Not having public liability insurance also makes your business vulnerable to a claim, which could be so costly that the business is forced to close down.
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Although it’s not a legal requirement for businesses in the UK, public liability is a popular cover for other valid reasons.
Three key reasons:
If you’re a member of a trade association or professional body, they may require you to have it
A client may require that you’re covered as a condition of work
The cost of a potential claim may well bankrupt your business – for many business owners, this reason alone is not worth the risk of going without cover
Public liability only concerns damage to property or injury to people who are not your employees.
If you want cover for injury, sickness or damage to your employees and their property, or damage to your own property, then you will need an additional insurance policy.
When you're running a business you will have a lot of different risks and responsibilities. You may have a number of employees, stock or equipment and machinery to buy and maintain, a business premises or office and computer software to check and upgrade.
You will need to keep customers and clients safe while visiting your premises, and keep their personal information and data secure on your IT systems. For this reason, most businesses need a range of cover.
Employers’ liability insurance: this covers legal and compensation costs if an employee becomes sick or injured while working for you
Professional indemnity insurance: in case you are accused of professional negligence.
Business contents insurance: protects your business equipment and stock.
Directors’ and officers’ insurance: this covers claims made against company directors or officers.
Cyber insurance: which pays out in the event of data breaches involving sensitive customer information.
The cost of public liability insurance depends on the size and scale of your business and the type of industry.
Your insurance premium will be affected by the number of employees and your business location.
Different businesses will have different risks. For example, a construction company will have different inherent risks from a broadcaster or a small family firm.
If you have a small business, then public liability insurance could cost you from £50 a year. If you run an SME your annual premium could be around £120 and larger companies will pay upwards of £450 a year or more.
Getting an online quote is the best way to gauge how much your public liability insurance is likely to cost – and using our online tool means that getting a quote takes less than 10 minutes.
One of the simplest ways to think about what public liability covers is to think about accidents.
Many businesses face claims from members of the public who sustained an injury while they were at the premises, such as slipping on a wet floor or a loose cable. Or it could be a large and serious claim involving a number of people.
Whatever the accident, you could be sued for causing severe or life-changing injuries. The cost of defending the claim could be high, and your business reputation could also be adversely affected.
Also consider, employers’ liability insurance (EI). It's important to assess fully the different risks that your business faces.
No, public liability insurance is not a legal requirement for businesses in the UK.
While public liability is one of the most popular types of insurance for businesses, it’s important to remember that it’s just one of many types of cover available and is best combined with other policies to provide your business with protection.
The main point to remember is that public liability only concerns your liabilities in relation to injuring or damaging the property of third parties and does not cover things such as injury or damage to your employees, or damage to your own property.
These can be covered by different types of business insurance.
Getting the right combination of liability insurance starts with assessing the risks your business faces.
Other popular types of business insurance include, but are not limited to:
Employers’ liability insurance, to cover legal and compensation costs associated with a claim made against you by an employee, due to injury or property damage.
Professional indemnity insurance, to cover legal and compensation costs associated with your business’s failure to meet contractual obligations with clients.
Business contents insurance, to cover items such as computers, documents and even cash in the event of theft or damage.
Directors’ and officers’ insurance, to cover claims made against company directors or officers.
Cyber insurance, to cover your business’s liabilities for data breaches involving sensitive customer information such as credit card numbers, passwords and personally identifiable information (PII).
Yes, your public liability insurance should cover you at a clients’ premises or elsewhere – so long as you’re carrying out business activities.
This depends on you.
You’ll be able to pick from a range of limits - ie £1 million, £2 million, £5 million and so on - for public liability cover.
If your needs change, you’ll frequently be able to add or remove cover free of charge – just remember to give your provider plenty of notice first.
Some good ways to figure out how much cover you need is by looking at:
Whether any professional or trade bodies you belong to require a minimum level of cover
What other businesses in your industry typically take out
This depends on the type of claim you’re making.
In many cases it’s a no, but some types of claims may require you to pay an excess.
Property damage claims, for example, can have an excess of £250 (which is what you’ll need to pay yourself).
No, public liability insurance covers injuries to anyone who isn’t an employee. For employees, you’ll need employers’ liability cover.
Yes, whether you’re a sole trader, partnership or limited company, all types of business can get public liability cover.
Travel insurance is a form of cover to protect you while you are away on holiday or travelling abroad. it can also provide monetary compensation for other loss or inconveniences you may suffer when your travels don't go to plan.
Professional indemnity insurance, or PI insurance, is designed to protect your businesses if a client loses money because of a mistake you made in your professional services.