Public liability insurance – what is it?

13/10/16 General

Public liability insurance is one of the main types of business insurance. It can cover compensation payments and legal costs if a member of the public (maybe a customer, a supplier, or a passerby) sues your business because they’ve been injured or their property has been damaged.

What does public liability insurance cover?

Public liability insurance can cover legal costs and compensation payments if your business is held responsible for injury or property damage to a client, contractor or another member of the public.

Imagine you’re a consultant visiting a client’s office and you spill a cup of coffee and damage their computer equipment. Or imagine an employee in your cleaning company fails to put out a wet floor sign after cleaning a floor and someone slips and breaks a bone.

In both cases, your business could be sued. Your public liability insurance could then cover the legal fees and compensation costs, up to the limit of your policy.

How much public liability insurance do I need?

It’s up to you to decide how much public liability insurance you need, although it’s sensible to check with your potential clients to see if they expect a particular level of cover.

In particular, government or local authority contracts usually ask for suppliers to have between £5 million and £10 million of public liability insurance.

You should also think about the scale of the work you do and the possible extent of compensation claims if something went wrong. Remember that compensation figures can be very high because they can take into account things like lost income and medical costs.

For more information please do not hesitate to contact ourselves