Do I need public liability insurance?

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Page written by Chris Godfrey. Last reviewed on August 28, 2025. Next review due April 1, 2027.

Public liability insurance (PL) is a good idea for almost all businesses, (including sole traders and the self-employed), but it is essential for those that interact with the general public and work for local councils or central government.

Some personal injury or property damage claims can run into the hundreds of thousands or even millions of pounds. If your business operations put your organisation in a position where a customer, client, supplier or a passing member of the public (even in or on a vehicle) could suffer injury or damage to their personal property, then you need PL to protect your business against the potential of crippling financial claims. Additionally, some customers may demand that you have public liability insurance before contracting with your organisation.

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Why you could need public liability insurance

Accidents can happen anytime, anywhere. Those that cause personal injury or damage to the property of the general public or your clients, customers, and suppliers as a result of the services your organisation provides, could have a huge financial impact on your business. Because accidents cannot be foreseen, public liability cover is the only way you can protect yourself and your business from events beyond your control.

What is public liability insurance?

Public liability insurance is a type of business insurance that protects your organisation if someone is injured, or their property is damaged because of the services that you or your business provides. This type of cover, also known as PL or liability insurance, is designed to protect your company against third party claims for injuries or property damage from a customer or client, passer-by, or a visitor to your business premises – whether you’re at fault or not.

Is public liability insurance mandatory?

No. Only employers’ liability cover is required by law. However, the potential losses from not having public liability insurance can far outweigh any premium savings you may obtain.

What trades need liability insurance?

Businesses that typically require PL to operate safely include:

Builders and Landscapers
Electricians
Plumbers
Carpenters
Cleaners
Roofers
Carers
Telecommunications and TV installers
Event organisers
Restaurants, Hotels and Pubs
Retailers
Beauty and Hair Salons

Is it worth having public liability insurance?

The average US public liability claim in 2023 was $13,500 plus defendant’s legal expenses. However, some compensation claims for personal injuries or fatality can run into six or even seven figure sums – more than enough to sink many SMEs. Compare this risk to the average $67 monthly cost for PL cover, it becomes clear that it’s simply not worth going without this type of insurance.

What does public liability insurance cover?

Public liability insurance can protect your business from the financial impact of claims that include:

Personal compensation – for the injury or death of a third party, including the loss of earnings and future loss of earnings
Medical fees – including the cost of calling out an ambulance, treatment and a stay in hospital for the claimant, plus their rehabilitation
Repairs – including the cost of labour and materials
Legal costs – including the cost of defending you against a claim and the claimants’ legal costs if you’re found to be at fault

What’s not covered:

Accidents that affect your employees or their possessions – if you employ anyone, you must have employers’ liability insurance by law. This covers anything that might happen to your employees
Accidents that happen to you or damage to your own property – protection for yourself or your business premises is usually covered under a general business insurance policy

How much public liability cover do I need?

The amount of public liability insurance you need depends on the industry you work in, and the size of your contracts or sales. In most cases, the bigger your sales are, the higher potential claims may be. (Keep in mind that a claim for personal injury or property damage will usually be increased by added legal fees and other clerical costs). If you work with government departments or local councils, you should consider a policy of up to $10million, although minimum cover levels typically start at around $5million, which is more suitable for small businesses, sole traders, and organisations that have less contact with the public.

What happens if I don't have public liability insurance?

If someone makes a claim against you or your business and you do not have public liability cover, you will be responsible for paying your own legal costs. If the claimant is successful, you may also be responsible for paying their legal expenses and compensation award.

How Swoop can help

All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let an accident or mistake become a catastrophe for your business. Contact Swoop today to compare top-quality public liability cover from different providers and to discuss all your business insurance needs.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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