What does public liability insurance cover?

A cup of coffee spilled on a client’s keyboard.

If a member of the public successfully claims you or your business injured them, public liability insurance will cover the legal costs along with any financial damages that you may be liable to pay. It’ll also protect you if you’re accused of damaging their property while carrying out your services.

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What incidents does public liability insurance cover?

Public liability insurance covers claims brought against you by members of the public who interact with your business. These claimants believe you are to blame for an injury or illness they may have sustained, or the loss or damage of their property while on your premises. This can also include incidents that may have led to accidental death.

Examples could include:

  • You’re a builder who accidentally knocks over machinery onto a passing cyclist. The cyclist could claim for injury caused along with damage to their bicycle, and any loss they incur from not being able to work afterwards. In these cases, your public liability insurance would cover you for the cost of damages and medical bills, along with the lost earnings.
  • You’re a painter and decorator who accidentally knocks a tin of paint over a brand new carpet while decorating inside a customer’s home, resulting in property damage. You could claim on your PL insurance policy to cover the cost of compensation for the damages.

What costs does public liability insurance cover? 

Public liability insurance will cover you for your legal fees, along with any loss of earnings to the claimant or medical bills arising from the injury. It’ll also cover you for any fees incurred to repair the claimant’s property or personal belongings that they believe were lost or damaged as a result of your business activities.

What does public liability insurance not cover?

Public liability insurance does not cover people who work for you – effectively your employees, temporary staff or anybody on work experience with you.

So, if a member of your warehouse staff hurts themselves in the work forecourt, or damages their mobile phone in the post room, you won’t be covered for any claims that they make against you. Instead, you’ll need to rely on employers’ liability insurance to cover the costs. Also, if a client claims against you due to injury or financial loss that they believe has arisen because of a product you’ve sold to them or a service you’ve provided for them, then you’ll need professional indemnity insurance – not public liability.

Take a look at our other forms of small business insurance to see if there are more policies that are appropriate to you and your business.

How much public liability insurance do I need?

Typically speaking, public liability insurance cover provides businesses with different cover limits ranging between £1m and £10m. This limit represents the maximum amount that your provider will cover in the event of a claim being made against your business. However, knowing how much cover you need to take out is not always straightforward.

It’s important to remember that if a third-party individual makes a claim against your business, you might be ordered to pay compensation. This could be for anything from a potential loss of earnings to medical costs, including future care. You may even have to cover both your legal fees and those of the person suing you.

So, to establish how much PL cover you need for your business, there are a number of deciding factors you need to consider. These include:

Business size

The size of your business is one factor which will determine how much cover you require. However, the nature of your business’ work and the amount of physical contact with the public this work needs is a better indicator of how much public liability insurance cover you’ll need.

Contact with the public

If members of the public interact with your business on a regular basis, you’ll need public liability insurance. You may run a cafe, restaurant or shop, or a plumbing business which requires you and your employees to regularly visit people’s homes. If so, you’re likely to have a high-risk public liability profile, requiring a larger PL policy. However, if you deal with clients and customers over the phone or online, you would be considered low-risk and need less cover.

Contract details

Some of the clients you work with may require a level of public liability insurance cover from all businesses that they work with. This will be in your contract with them and is not unusual. For example, live performers and DJs, who are booked to work at a number of specific venues, will need a public liability policy that covers each one.

Industry risk

Consider the type of work your business does. If you carry out potentially dangerous tasks or use materials and equipment that could injure individuals or damage personal property, you’re going to require more PL cover than a business that operates in an industry that poses few risks.

Trade bodies and associations

Many industries are heavily regulated and have associated trade bodies, meaning you may need public liability cover to be a member. It’s worth checking to see how much public liability cover you’ll need.

Previous claims

Have you made claims in the past? If so, your insurance provider may consider you more of a risk than a company that hasn’t made any claims and the size of your premium will reflect this.

Frequently Asked Questions

Who is covered by public liability insurance?

You and your employees will be covered by your public liability insurance policy. This directly relates to anything that a member of the public claims you or your employees did that resulted in injury, illness, damage, or loss to them while on your property or partaking in your business activities.

Is having public liability insurance part of my business compliance?

Although having public liability insurance in place is not usually a legal requirement, it is a wise choice for most businesses who interact with the public in one way or another.

Is public liability insurance tax deductible?

Yes. It’s an ‘allowable expense’, meaning you can deduct the cost of your premium when calculating your taxable profit for the tax year.

Do self-employed people or freelancers need public liability insurance?

If you host clients – whether that’s in your home, an office building or at a shared workplace - public liability insurance is important. It provides cover if the worst should happen, and it demonstrates you’re serious about maintaining a positive professional relationship.

Why should I choose Markel for public liability insurance?

With over 25 years’ experience in the business insurance market, you can trust Markel Direct when it comes to robust, reliable financial protection. Our experienced solicitors are available 24 hours a day, 7 days a week to give you legal advice when you’re facing a legal claim. There are no hidden fees either – we’re completely transparent when it comes to cost and if you want to change or cancel a policy, you won’t be charged any extra fees.

You can also get a public liability insurance quote in as little as 90 seconds when you fill in our easy online form. Just use the button below or call our team today on 0330 822 3550 to discuss your needs.

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