Do I need public liability insurance? Do I need public liability insurance?

Whether your business involves lots of in-person interaction with members of the public — for example, a restaurant, salon, tradesperson or shop — or you spend time working on-site or in public areas, there’s always the possibility that an accident will happen.

This can leave you liable to compensation and legal costs if someone who isn’t employed by you gets injured or their property is damaged.

Without cover in place, you could then be left footing the bill if they make a claim against you.

Although public liability insurance is not a legal requirement under UK law, there are three key reasons why it may still be beneficial:

1. To satisfy contracts with clients or business partners. Some businesses won't work with your company unless you have public liability cover — and some, particularly government or council contracts, may even specify a minimum level of cover. So if you don’t have the right cover, you could miss out on work.
2. Working with a business association. Some trade and business associations won’t grant membership to companies that aren’t able to show proof of public liability cover.
3. Survival. Many small businesses would be unable to afford a large claim against them. Compensation claims can range from four figures to millions of pounds. And while it’s not cheery, it’s important to think about. Consider the worst-case scenarios for your business — would you be able to recover from a large claim?

Public liability cover is designed to protect your business against claims arising from injury or damage from anyone who isn't an employee.

It can cover accidental damage and injury claims, and the legal fees and compensation costs associated if a claim was made against you. This includes court appearances and defence fees.

You can choose different limits of cover — at Superscript, we offer three limits: £1 million, £2 million or £5 million. This is the maximum your insurer will pay out if you need to make a claim. If you find that you have too little or too much cover for the type of work you do, we offer fee-free policy adjustments.

Get more information on what public liability insurance can cover.

Public liability cover is designed for third-party claims — those from outside of your organisation.

That means if one of your staff is injured or their property is damaged while they’re working for you, you won’t be covered by public liability insurance. If you have employees, you may be legally required to have employers’ liability cover.

It also doesn’t cover goods you sell, or materials or services that you supply as part of your work.

Your quote and policy documents will provide you with a list of what is and what isn’t covered by your public liability policy, so it’s important to check those thoroughly to ensure you’ve got the right cover for your business. For more information, read our guide on how to read your policy documents.

If you run an online business and work from home, there are some instances where having public liability might be worth considering. For example, if you:

• Invite clients, suppliers or partners into your home for in-person meetings, treatments or consultations as part of your work
• Meet with clients, suppliers or partners in person in their offices or out and about
• Attend trade shows, markets or events in a business capacity

This is because your home insurance usually won’t cover business activities.

However, if you work from home and have no in-person interaction with anyone, you’re unlikely to need public liability insurance.

Depending on the policy you have, public liability will often cover forcible theft if it's the theft of someone else's property that you’re responsible for. For example, if you’re carrying out repairs in a shop and prop the door open while moving materials, a thief sneaks in, grabs the till cash, leading the shop owner to claim against you.

If you’re worried about your own property, on the other hand, you’ll want to consider business contents insurance or tools cover.