Do I need public liability insurance?

If your business comes into contact with members of the public, it’s likely you’ll decide you need public liability insurance. It can cover your business if it’s sued for injury or damage, so it’s popular with tradesmen, hairdressers, shopkeepers and many other business types.

Is public liability insurance a legal requirement?

Public liability insurance isn’t compulsory by law, but many businesses decide that they need it to protect themselves from crippling compensation costs, and also to satisfy the requirements of potential clients.

As it can protect you if you’re sued by a member of the public, this insurance is particularly important if you interact with customers, suppliers or passersby in the course of your work.

You may decide you need public liability insurance because you come into contact with third parties in one or more of these ways:

  • Customers visit your premises, for example you have a hairdressing or beauty salon, a shop or a restaurant
  • You work on client sites, for example you’re a tradesman carrying out work in people’s homes
  • You work in public, for example you’re a builder, and your work could potentially cause injury or damage to someone passing by

Ultimately, it’s up to you to decide whether your business needs public liability insurance, although it’s worth thinking about whether you could afford to meet the cost of a compensation claim if your business was sued and you didn’t have cover.

It’s also worth checking whether clients or potential clients expect you to hold a policy. Local government contracts in particular will usually say you need a particular level of public liability insurance.

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