What is public liability insurance?

Public liability insurance is one of the most commonly held forms of business insurance in the UK, and one that many clients, venues, and event organisers require before they will engage with a supplier. Despite its prevalence, many founders take out a policy without a clear understanding of what it actually covers, or whether the level of cover chosen is appropriate for the nature of their work.

Public liability insurance covers a business against claims made by third parties — typically customers, members of the public, or visitors to a business premises — for injury or property damage caused by the business or its employees. If a customer slips on a wet floor in your office, or your work accidentally damages a client's property, public liability insurance covers the legal costs and any compensation awarded. It does not cover claims from your own employees — that falls under employer's liability insurance.

Public liability insurance is not legally required for most businesses, but it is effectively mandatory in practice for anyone working with the public, visiting client premises, or operating in a regulated sector. Many contracts and venue agreements specify a minimum level of cover. Our guide to business insurance for UK founders covers what level of cover is appropriate for different types of work.