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Public Liability Insurance for Small Businesses

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Insurance for Small Business Owners

Public liability insurance protects your business if a member of the public takes legal action for damage to their possessions, an injury, or death as a result of your negligence. It’s vital for any business that has interaction with the general public.

The cover is part of a packaged product ‒ not a standalone cover.

Key Features and Benefits

  • Cover for a wide range of policy limits to suit your needs. Cover for £10 million plus is available through excess layer policies. 
  • £250 court attendance costs per day to defend a claim.
  • Access to a 24-hour legal helpline.
  • Legal costs of up to £1 million for claims of accidental bodily injury, loss or damage to third party material property, or wrongful arrest in connection with the business.
  • Legal costs/expenses in connection with alleged breach of statutory duty under health and safety, consumer protection or food safety legislation.
  • Legal costs in connection with criminal inquiry into manslaughter/corporate manslaughter, culpable homicide or corporate homicide.

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What is Public Liability Insurance?

Public liability insurance helps protect your business against damage and the cost of legal claims that people may make against you. For example, if something happens at work that results in injury to a customer, a member of the public or damage to someone’s property.

Public liability insurance isn’t a legal requirement. However, many businesses see it as essential to protect them from potential high compensation claims.

Some of your customers may insist you have public liability cover in place before engaging with you, as do some trade bodies and professional associations.

If you run a business, you should consider purchasing public liability insurance if:

  • Clients visit your premises.
  • You work at clients’ locations.
  • You work with the public (for example, a hairdresser).

What is Not Covered?

Personal accident: public liability won’t cover you if you’re injured as part of your business activities. You’ll need to take out health insurance for this.

Claims made by employees: if your employees are injured or become ill as a result of working for you, you’ll only be covered if you have an employers liability policy. Public liability won’t cover any compensation or legal fees associated with these claims.

Your property and equipment: you should consider buildings cover or tools and equipment cover. This covers the cost of repair or replacement should you need to make a claim for loss or damage to your own property and equipment, as a result of your business activities.

Professional indemnity: public liability won’t cover you if a claim is due to any advice, design, plans, specification or certification provided by you. You will require professional indemnity insurance for this.

Unsure as to whether you need public liability insurance?

Call us on 0330 732 865 to discuss what kind of cover you need, our friendly team is always happy to help.

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Public Liability Insurance FAQs

Imagine you’re a hairdresser visiting a client at their home and you spill dye on their carpet. Or imagine your employee fails to put out a “wet floor” sign out after cleaning, and a customer slips and injures themselves. In the above situations, your business could be on the receiving end of a lawsuit. You need public liability insurance to protect you when these things happen.

Public liability insurance covers your legal liability if you or an employee is deemed responsible for damaged possessions, bodily injury, or death to a member of the public. Whether they’re a customer, supplier, contractor, or simply a passer-by, if the accident happened as a result of your business activities, you’ll be very glad you had public liability cover.

This cover can include the cost of repairing or replacing possessions, NHS hospital costs, legal fees associated with defending a case, and compensation claimed by the individual. This can include reimbursement for loss of work.

In most cases, public liability insurance is not a legal requirement in the UK. However, it is worth considering for any business as it protects you against claims and legal action for injury and property damage.

Your local authority and trade associations may also request proof of public liability insurance before allowing you to register with them.

To determine what the right amount of coverage is for your business, you should consider various factors, including the potential extent of compensation claims and the cost of repairing any damages.

The specific amount of coverage you’ll need will depend on certain details, such as:

  1. Business size.
  2. Level of public interaction.
  3. Scale of contracts/type of business.
  4. Claims history.
  5. Level of risk associated with the industry.

Although it’s not legally required, if your home-based business frequently receives visitors, we’d advise you to think about getting public liability insurance.

For instance, if your client visited your home office and tripped over a stray wire in your hallway and suffered an injury, public liability insurance would help cover the medical costs and potential legal fees.

Similarly, if you accidently damaged a client's property whilst they were at your home office, public liability insurance would financially cover you for this as well.

Even if you’ve been running your business for many years, accidents can occur unexpectedly. Public liability insurance provides protection by covering you against potentially harmful legal claims and compensating on your behalf.

Having this cover reduces the risk of claims negatively impacting your business profits.

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