Do I Need Public Liability Insurance

Public liability insurance is one of the most commonly held types of business insurance in the UK, especially among sole traders, contractors and small business owners. But while it's widely recommended, it's not legally required in every case. So do you really need it?

In this guide, we explain what public liability insurance is, who it applies to and why it might be essential for your business. Whether you’re a builder, electrician, event organiser or self-employed consultant, understanding your obligations and risks can help you make the right decision.

What Is Public Liability Insurance?

Public liability insurance covers the cost of claims made by members of the public who suffer injury or property damage as a result of your business activities. This could include customers, clients, suppliers or passers-by.

Typical claims covered by public liability insurance include:

• A customer tripping over your equipment

• Damage to a client’s property while working on-site

• An injury caused by a faulty product or poor workmanship

The policy typically covers legal fees, compensation payments and any associated costs if you are found liable.

Is Public Liability Insurance a Legal Requirement?

In most cases, public liability insurance is not legally required by UK law. However, there are several important exceptions and practical considerations.

For example:

• Local authorities and main contractors often require subcontractors to hold public liability insurance before awarding work or allowing site access

• Events and markets may not grant permission to trade without proof of cover

• Industry trade bodies may insist on cover as part of their membership criteria

• Clients may request it as part of contractual terms

So while not legally mandatory for all, it is often functionally essential for running a business, especially in the construction, events or personal services sectors.

Who Needs Public Liability Insurance?

If your business involves interacting with the public, entering client premises, or working on third-party property, public liability insurance is strongly recommended. This includes:

• Builders and tradespeople

• Cleaners and decorators

• Retailers and shop owners

• Mobile hairdressers or beauticians

• Fitness instructors and personal trainers

• Event planners and entertainers

• Consultants and freelance professionals working on-site

Even if you work from home, you may still be liable for accidents involving visiting clients or delivery personnel.

For example, a self-employed gardener may not be legally required to have public liability insurance, but if a member of the public trips over a lawnmower left on a footpath and breaks their ankle, the gardener could face a claim running into thousands of pounds.

What Does Public Liability Insurance Cover?

A standard public liability policy covers:

• Compensation claims for injury or property damage

• Legal expenses if a claim is made against you

• Medical costs and hospital charges

• Accidental damage caused while working

The amount of cover you need will depend on the size of your business and the nature of your work. Policies usually offer cover ranging from £1 million to £10 million.

It’s worth noting that public liability insurance does not cover your employees. If you employ anyone, even part-time or casual workers, you must also have employers’ liability insurance, which is a legal requirement under UK law.

What Happens If I Don’t Have It?

If you do not have public liability insurance and someone makes a claim against you, you would have to cover:

• Legal costs

• Compensation payments

• Any loss of business due to reputational damage

Even small claims can be financially devastating for sole traders or small businesses. Without insurance, one accident could put your entire operation at risk.

Furthermore, not having public liability insurance may limit your ability to:

• Win contracts

• Work on construction sites

• Join professional trade organisations

• Rent business premises

Clients may see the lack of insurance as a red flag, especially in sectors where risk is higher.

How Much Does It Cost?

The cost of public liability insurance varies depending on factors such as:

• Your industry

• The level of risk involved

• Your claims history

• The amount of cover required

As a rough guide, a low-risk self-employed person (such as a freelance copywriter) might pay around £50 to £100 per year, while higher-risk professions like builders or electricians may pay £150 to £500 or more, depending on the size of their operation.

Getting quotes from multiple insurers and using a broker can help find the best deal tailored to your business.

How Do I Get Public Liability Insurance?

You can obtain public liability insurance through:

• Specialist business insurance providers

• Comparison websites

• Insurance brokers

• Trade associations (which may offer discounted group policies)

When applying, be ready to provide details about your business activities, number of employees, turnover and claims history. Be honest and thorough to ensure you get the right level of cover.

Final Thoughts

While public liability insurance is not a legal requirement for most UK businesses, it is often a commercial necessity. If your work involves any contact with members of the public, entering client premises or working in potentially risky environments, having public liability cover can protect you from costly claims and give your clients peace of mind.

In today’s risk-aware world, being uninsured is not just a gamble—it can be the difference between keeping your business afloat or shutting up shop after one unexpected accident. If you’re still unsure, speak with an insurance adviser or broker who can assess your needs and recommend the right cover.