A Guide to Public Liability Insurance

Public liability insurance could be the most important cover you have. Not only does it pay out for claims that could otherwise topple a successful business but in many cases not having it would put customers and partners off using your services. Our simple guide looks at the main features and pitfalls.

What is public liability insurance?

If a customer or third party person was to injure themselves or have something damaged as a result of your business activities, your business could be held liable. This means that you would have to pay the compensation claim and incurred legal expenses. If you have public liability insurance it can cover these costs.

What does this mean in simple terms?

If a customer slips on a wet floor in your business premises or someone falls on some stairs because of a ripped carpet, your business could be liable because of its responsibility to provide a safe environment for the public.

Do I need Public Liability Insurance?

Almost every business should have some form of public liability insurance because despite all the precautions under the sun accidents can and will happen, and being vulnerable to a law suit can spell disaster for a growing business

In fact – many other businesses will not work with you unless you have PL insurance and local councils often require business under their catchment to have public liability in place before trading.

Public liability insurance is not usually a legal requirement like Employer’s Liability insurance is but, considering it is designed to cover claims that could be into the millions, shows you how just important it is. There aren’t too many businesses that can safely operate without this protection, not to mention the ethical duty to be able to provide compensation should someone suffer loss as a result of your business.

What things are usually claimed for?

The possibilities of course are endless but as a rough guide the common claims come under these headings:


Tree roots, snagged carpets, a protruding screw head or broken door. Your duty of care dictates that you maintain the properties and places of work but accidents still can happen.

Slips or Trips

Pubs, shops, offices and any private or public area you work could see a hazard created by something spilt by someone or something in your business.


Such as items being dropped, falling or breaking whilst in use. These can cause accidents or damage in ways which can’t be predicted. Against all risk precautions insurance for these unavoidable events should always be in place.


Work vehicles, goods being moved in transit, transporting people and driving for business use possess a risk to anyone coming into contact.

public liability, staff room, office, coffee

No business fits neatly into any one risk category because each one is unique. The job of a specialist insurer is to understand your industry and get to know your business model. That way they can provide or source the cover that best protects your customers.

How much public liability insurance do I need?

This question is a bit like asking, “How long is a piece of string?”. You need as much as you need for your specific risks, and for each business this is different. You can source cover as low as £1 million although any business with any regular contact with the public will most likely start there cover at £2 million at the minimum. Cover generally goes up to around £10 million and most small to medium businesses fit themselves somewhere in the middle. Your local council or work contracts may also impose minimum levels on you.

You may find some advice from the governing bodies in your particular industry and your insurance adviser will be able to talk you through the process of working out what you might need.

What else do I need?

Public liability is rarely taken in isolation - without some other form of business insurance. Take a look at our other liability guides or browse the business insurance pages for more information on the other aspects to fully protecting your business.

Related products

Employers liability

Professional indemnity

Directors and officers liability