What is public liability insurance?

Definition of public liability insurance

Public liability insurance protects your business against compensation claims and legal costs if you cause personal injury, death or property damage/loss to a third party. Most policies cover you for incidents at your premises or off-site at events or activities organised by your company.

Do I need public liability insurance?

Public liability insurance isn’t a legal requirement, however it’s regarded as an essential among business owners and in some professions you can’t trade without it. It should be considered if you own premises that members of the public visit, if you organise off-site events or run a business from your home, for instance.

You can buy public liability insurance directly from an insurer or from a specialist broker. The cost of your premium (the amount that you or your business pays for an insurance policy) usually depends on the nature of your business, the number of people you employ and your insurance claims history.

Example of public liability insurance

If an employee at your cleaning company forgets to put a wet floor sign up after cleaning a floor and someone slips and injures themselves, you could be sued. Public liability insurance would cover any legal fees and compensation costs.