Public and Product Liability Insurance

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Public liability insurance for small businesses

Almost every business comes into contact with customers or the wider public. Public and product liability insurance covers your business against claims of physical harm or property damage made by third parties. This type of cover is different from employers’ liability insurance, which protects your business against compensation costs if an employee and other people who work for you, like family members or some types of contractors becoming ill or injured as a result of the work they do for you.

Public liability isn’t a legal requirement for UK businesses, but most consider it essential for the smooth running of their business.

If your enterprise offers products, services or advice to customers, you’ll almost certainly need to consider public liability insurance cover. This is important protection particularly for businesses with direct customer interaction or higher risk profiles. A few examples of the sectors that can benefit from this insurance are:

Public liability insurance in the UK covers you for a range of mishaps and risks. It can cover your business if a third party, such as a customer or a member of the public, takes legal action for injury to themselves or damage to their personal property as a result of your business activities. This could include claims as varied as tripping on a wire, food poisoning or damaging a prized artwork.

Public and product liability insurance can help to cover compensation costs and legal fees you are required to pay if a member of the public is harmed, or their property is damaged as a result of your business activities. Unexpected costs can be substantial, even if you’re not at fault, legal fees can still mount without cover. We can advise you on a range of cover options. Give us a call to work out the right level of public liability insurance to protect your business needs.

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Frequently Asked Questions about Public Liability Insurance

What does public and product liability insurance cover?

Public and product liability insurance is taken out by businesses to cover them in the event of legal claims made against the business. Typically, it is intended to cover your business against claims made by members of the public for injury or damages to their property. These may be customer injuries or property damage, caused by coming into contact with your business's premises, products or services, or in the course of business operations.


One of the main functions of public liability insurance is to cover compensation claims and legal costs for third party injury (or even death). It can also protect your business against repair or replacement costs for damaged property or possessions. Where medical attention is required, in some cases, the NHS would seek to recover costs if your business were found to be negligent.

Who needs public liability?

Any business that wants to operate smoothly in the UK should consider public liability insurance. This insurance covers your business against compensation claims and legal costs in the event of harm to third parties or customers. This includes personal injury or property damage that’s due to your business activities. This risk can affect any business.


The more interaction your business has with the public the greater the risk of injury or damage. There are also more risks if you deal with hazardous situations or potentially harmful materials.


Most building and construction businesses, for example, wouldn’t operate without adequate public liability insurance cover. Often your client will require you to have this cover in order for you to be able to work for them. Other trades and services like electricians, plumbers or hairdressers should also make sure they consider public liability insurance.

How much is public liability insurance?

Public liability insurance costs vary with the type, size and risk profile of the business. In general, the following factors will all be taken into consideration when you look for a public liability insurance quote:


  • Industry sector and business type
  • If you have employees or business premises
  • Business location(s) and geographical distribution
  • Annual turnover
  • The amount of cover you need

Is public liability insurance legally required?

Public liability isn't a legal requirement. However, the risks of operating without it could be very costly for a small business.


It’s also common for clients to insist on it as a condition of you doing business with them - for example, if you have a building contract with a local council. Furthermore, some trade associations won’t allow you to register unless you have public liability in place.

What is the difference between public liability and employers’ liability?

The main difference between public liability insurance and employers’ liability insurance is the type of people your business interacts with. Public liability can cover you for claims made by a third party, such as a customer or a member of the public, rather than your employees.


A third party may pursue damages for personal injury or to private property as a result of some interaction with your business activities. Public liability insurance is designed to protect you against compensation costs, legal costs, repair costs and medical bills in the event of such claims.


Employers’ liability insurance covers a similar range of possible claims, but in the case that the person claiming is one of your employees. "Employees” can be a range of people who work for your business, including full-time, part-time or temporary staff, apprentices and volunteers.


Another difference between these two insurance types is that employers’ liability insurance is required by law for most businesses in the UK, while public liability is not.

Do you need customised business insurance for your company?

Or speak to us for advice and recommendations customised to your business needs.

0330 054 5244
The Aon Centre

The Leadenhall Building, 122 Leadenhall Street

London EC3V 4AN