Compare Public Liability Insurance

The cover your business needs depends on the risks it faces. You legally need the following:

• If your business has employees, you need to have employers’ liability insurance by law (with a few exceptions).
• You need commercial vehicle insurance if you use a car, van, or other vehicle as the main part of your business activities.
• You need business car insurance if you use your car for your business (beyond commuting).

Other than that, you could consider:

• professional indemnity insurance, which some industry bodies require
• product liability insurance if your business makes, supplies, sells or repairs products, or even hands out samples for free
• business contents insurance, to cover belongings, including stock and equipment

Other types of business insurance you might consider include business interruption insurance and cyber insurance.

No, public liability insurance isn’t a legal requirement, unless you own a horse-riding business. However, you will need this cover if you bid for government contracts, and some clients and membership bodies may ask that you have a minimum level of cover.

Even if the above does not apply to you, it doesn’t mean you shouldn't consider it. Any business that comes into contact with the public should consider the benefits of having protection for legal and compensation costs after injury to a member of the public or their accidental death, or damage to their property, caused by your business.

Without cover your business would be liable to pay legal fees and compensation costs if a member of the public has an accident or their property is lost or damaged and your business is to blame.

This may include medical bills, loss of earnings, damage repair bills and solicitor’s costs, or compensation to their beneficiaries after an accidental death. So while it’s not compulsory cover, consider that these costs could be extremely high. And for some types of work, not having cover may exclude you from bidding for contracts or taking part in off-site events.

Yes. Public liability insurance, and other business insurance policies, are allowable expenses. This means the cost of these policies are tax deductible.

Public liability insurance covers legal and compensation costs if a member of the public, a client or a visitor is injured or killed, or their property is lost or damaged, and your business is responsible. Employers’ liability insurance protects your business if one of your employees is ill or injured while at work and claims compensation.

Public liability insurance is not generally compulsory, while employers’ liability insurance is a legal requirement if your business has employees, with a few exceptions. The penalty for not having employers’ liability insurance is £2,500 a day.

If an employee is responsible for an injury to someone outside the business or loss or damage to their property while working, your business’s public liability insurance should cover this.

However, public liability insurance doesn’t cover you if your employee gets ill or injured during their work and they try to make a claim. To get cover for this, you would need employers’ liability insurance.

Technically no, as public liability insurance isn’t required by law. However, as most businesses will have some form of contact with clients, customers, and members of the public, it’s a policy that many companies may want to consider having in place.

» MORE: Do I need business insurance?

If you run your own business as a sole trader or freelancer, it could make sense to consider public liability insurance if you come into contact with the public. For example, perhaps clients visit your home, you exhibit or sell at public events,or maybe you provide a service to clients in their home.

If your business causes injury or even death, or is responsible for loss or damage to property, you could face compensation claims and legal costs. With public liability insurance, these costs would be covered, up to a maximum amount.

Public liability insurance won’t cover injury or illness to you or your employees as a result of their work. Only employers’ liability insurance covers any claims made by your employees.

It also won’t cover the cost of repairing any damage you cause to your own property. If you want cover for your own property, such as stock or equipment, you would need business contents insurance.

Yes, insurers offer packaged business insurance deals. Public liability insurance is only one type of insurance cover your business might need. If you have one or more employees, you will likely need employers’ liability insurance. Other types of cover this might be bundled with are professional indemnity insurance, commercial property insurance and product liability insurance. Always read your policy in detail, so you know you have the level of cover your business needs. It can also be worthwhile checking prices for separate individual policies with different providers as opposed to bundled policies as this could work out cheaper.

As soon as someone has made a claim against your business, or even if you’re aware of injury or damage but no claim has yet been made, you should follow the steps advised by your insurer. This includes not negotiating with the injured party and contacting the provider as soon as possible.

Bear in mind that if you are making a claim for an amount below your agreed excess (the amount you pay towards a claim), you won’t be able to make a claim against your policy and will need to pay the bill yourself.