Do I Need Public Liability Insurance?

Public Liability Insurance is designed to protect businesses and self-employed individuals from legal claims made by members of the public who suffer injury, property damage, or financial loss due to their business activities.

While Public Liability Insurance is not legally required, many businesses take out cover to protect against expensive compensation claims and legal fees. Some clients, landlords, or trade associations may also require proof of cover before allowing work to begin.

This guide explains who needs Public Liability Insurance, what it covers, how much cover you might need, and what it doesn’t include.

Who Needs Public Liability Insurance?

Any business that interacts with the public should consider Public Liability Insurance. This includes:

• Sole traders and freelancers who work with clients.

• Businesses with a physical location, such as shops, cafes, and salons.

• Tradespeople, including builders, plumbers, and electricians.

• Event organisers responsible for public gatherings.

• Self-employed professionals offering services to clients.

Even if you work from home, you may still need cover if clients, couriers, or suppliers visit your premises.

Is Public Liability Insurance a Legal Requirement?

Public Liability Insurance is not legally required in the UK. However, some businesses must have it due to contractual obligations.

• Government contracts, landlords, and trade associations may require proof of cover.

• Some local councils require it for market stalls, street vendors, and event organisers.

Even if it's not mandatory, having Public Liability Insurance can protect your business from unexpected claims.

What Trades Need Liability Insurance?

Certain trades have a higher risk of accidents and claims, making Public Liability Insurance essential. These include:

• Construction workers and tradespeople – High risk of injuries and property damage.

• Hairdressers and beauty therapists – Potential for allergic reactions or burns.

• Retail businesses – Slip and trip hazards for customers.

• Hospitality (restaurants, cafes, bars) – Food safety issues and accidents.

• Fitness instructors and personal trainers – Risk of client injuries.

For businesses dealing with customers, suppliers, or the general public, having insurance can prevent financial losses from legal claims.

What Does Public Liability Insurance Cover?

Public Liability Insurance covers claims made by third parties for:

• Personal injury – If someone is injured on your premises or due to your business activities.

• Property damage – If you damage a customer’s home or belongings.

• Legal expenses – Covers legal costs if a claim is taken to court.

• Compensation payouts – Covers settlements awarded to claimants.

Example Claims Covered by Public Liability Insurance

1. A café customer slips on a wet floor and breaks their arm. They sue the business for compensation.

2. A tradesperson accidentally damages a client’s property while carrying out work.

3. A festival organiser is sued after a stage collapses, injuring attendees.

In all cases, Public Liability Insurance would cover legal fees, medical costs, and compensation.

How Much Public Liability Cover Do I Need?

The level of cover required depends on your business activities and risks.

• Small businesses and freelancers may need £1 million cover.

• Shops, tradespeople, and contractors may require £2 million to £5 million.

• Large events or construction projects may need £10 million or more.

Some clients or contracts may specify a minimum level of cover required, so always check before purchasing a policy.

What Does Public Liability Insurance Not Cover?

Public Liability Insurance does not cover:

• Employee injuries – This requires Employer’s Liability Insurance.

• Damage to your own business property – Covered by separate business insurance.

• Professional mistakes or poor advice – Covered by Professional Indemnity Insurance.

• Criminal acts or intentional damage.

If you need broader protection, consider combining Public Liability Insurance with other business policies.

Final Thoughts

Public Liability Insurance is not legally required, but it is highly recommended for businesses that deal with the public. It protects against injury, property damage, and legal claims, ensuring that businesses can operate without the risk of costly compensation payouts.

For businesses that work with customers, suppliers, or events, Public Liability Insurance provides peace of mind and financial security. To find the best policy, compare providers and check any contractual insurance requirements before purchasing.