How much is public liability insurance?
Public liability (PI) insurance should be a key consideration for any business that interacts with the public. But how much should you expect to pay?
It’s tricky to specify the exact cost, as the price of your public liability insurance policy will depend on the unique risks your business faces, as well as how much cover you take out. Factors like the size and nature of your business can all affect your PI insurance premium. We explain all you need to know in this guide.
With Markel Direct, you can choose between £1 million and £5 million of cover, starting from £5 per month*. Not sure if you need it? Click below to learn more.
*The £5 a month premium referenced is based on a public liability insurance policy (including products liability) with a £1 million level of cover.
How much does public liability insurance cost?
Costs for public liability insurance for businesses vary. At Markel Direct, we offer public liability insurance from £5 per month for £1million worth of cover*. In the UK, insurers look at a range of factors when calculating the cost of public liability insurance. They want to understand how likely it is you’ll need to claim on your insurance – as some businesses are at a higher risk than others.
The less likely your business is to come up against a public liability claim, the lower your premium will be. For example, a sole trader working in a low-risk industry would pay less than a large-scale limited company working in a high-risk industry.
Here are some example indicative public liability insurance quotes for different trades:
- Carpenters insurance is from £8 a month - price based on a carpenter/locksmith requiring £1 million public liability insurance cover
- Builders insurance is from £10 a month - price based on a builder requiring £1 million public liability insurance cover
- Online retailer insurance is from £9 a month - price based on an online retailer requiring £1 million public liability insurance cover
- Teachers insurance is from £14 a month - price based on a teacher requiring £1 million of PL and PI combined
Some of the key factors that can increase your insurance premium include:
- Doing manual work at third-party premises
- Selling goods to members of the public
- Having a high turnover
- Being located on premises that receive a lot of footfall from the public
The main factors that affect public liability insurance cost are:
The amount of cover you choose
This is the main driver behind how much your public liability insurance costs. The more cover you take out, the higher your premium will be. Having said that, it’s worth noting that the cost per every pound insured gets less with the more coverage you take out. (Insurers usually offer policies starting at £1 million of coverage going up to £5 million or more.)
So, for example, you might be able to get £2 million worth of coverage for just a few pounds more a year than you’d pay for £1 million of coverage.
The size of your business
Generally, the bigger a business is, the more risk it’s exposed to in terms of public liability. This is because the business is more likely to interact with more members of the public – whether customers, contractors, or suppliers.
The business may also be spread across multiple premises, which might come with their own risks.
It’s important to note that this is just one factor to take into consideration, though. Even very small businesses can be exposed to significant public liability risk, especially those in higher risk industries.
The type of work you do
Insurers know that some industries simply carry more public liability risk than others.
An obvious example is the construction industry – HSE figures from 2014-2023 show that a UK worker is much more likely to get injured on a building site than they are working in a finance or business service role in an office. Likewise, things can occasionally go wrong during building work, leading to property getting damaged .
Businesses that rely on high levels of public interaction – like shops and cafes – are also seen as more exposed to public liability issues. As are workplaces like hair and beauty salons, where there’s a chance of a treatment going wrong leading to injury.
If you’re in a high-risk industry – don’t worry. The cost of public liability insurance is still usually very affordable. And considering the cost of having to handle a claim alone, which could rack up into the thousands or millions, most businesses see it as a small price to pay.
Your business location and premises
If your business premises get a lot of footfall from the public, your public liability insurance premium might be a little higher . This is because more people visiting the premises increases the risk of accidents, injuries or property damage, which could lead to potential claims against you. For example, a popular retail store has a greater risk of customers slipping or falling than a small office, while a busy restaurant setting carries a higher risk of spilled food, burns and scalds than a small design studio.
Similarly, if you operate out of a shared office space with other businesses, you may see your premium go up due to the fact there are more members of the public in close proximity to your business. Employees of other businesses are classed as members of the public too.
Your business turnover
Having a higher turnover might indicate you're more exposed to public liability risk for a few reasons. It could mean that you generally deal with more clients, or that you're often around high-value property. Or, it might simply indicate that you operate on a large scale, which generally opens you up to more risk.
Your business's public liability claims history
If you’ve faced one or more legal claims relating to public liability in the past, insurers are likely to see you as riskier to insure. This is because your business has already been proven to be exposed to risk.
Common scenarios leading to public liability claims
There are many different scenarios that could lead to a public liability claim. These could include:
- A private tutor spills a glass of water on their student’s laptop, who seeks £1500 in compensation for a replacement.
- A cafe owner accidentally leaves some cables trailing across the floor in their establishment. A customer trips on them and injures their knee. They seek several thousand pounds in compensation.
- A construction company is working on a public building using scaffolding. A piece of scaffolding comes loose and falls on a passer-by, significantly injuring them. They seek tens of thousands of pounds in compensation.
Tip: learn about the difference between professional indemnity vs public liability insurance
The best way to find out the exact cost of public liability insurance for your business is to get a tailored quote. The process is relatively quick and simple, and means you’ll be able to make an informed decision about whether or not you feel the insurance is worth it.
Remember, many clients will require you to have public liability insurance in order to work with them. Plus, for the cost of a few pounds a month, you can get millions of pounds worth of cover to protect your business against expensive legal claims. Most businesses that interact with the public in any way see this as a more-than worthwhile investment.
*The £5 a month premium referenced is based on a public liability insurance policy (including products liability) with a £1 million level of cover.
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Kind of Accident Statistics in Great Britain, HSE 2023