How much is public liability insurance for a small business?

There is no standard price, because the premium is rated on your own business rather than a list. The factors that move it most are what the business does, annual turnover, the indemnity limit you choose, how many people you employ, your claims history, and whether the cover is bought on its own or as part of a combined policy with employers liability, contents and business interruption. Because insurers rate the same risk differently, it is worth having a broker put it to more than one.

Do I need public liability insurance for my small business?

If anyone other than you and your staff can be injured, or have their property damaged, because of what your business does, you need it in practice even though the law does not require it. Shops, cafes, tradespeople, cleaners, fitness instructors, market traders and anyone visiting client premises all carry that exposure. Most commercial leases, client contracts, local-authority licences and trade-body memberships make a public liability policy a condition.

Is it illegal to run a business without public liability insurance?

No. Public liability insurance is not compulsory under UK law, so trading without it is not an offence. The compulsory cover is employers liability insurance, which you must hold, at a minimum of 5 million pounds, as soon as you employ anyone, including casual and part-time staff. Where public liability becomes obligatory is by contract: a landlord, client, council or trade body can require it as a condition.

Is general liability insurance the same as public liability insurance?

For a UK small business, yes. General liability is the US term; public liability is the UK term for the same third-party injury and property damage cover. A US general liability form usually bundles products liability into the policy, which in the UK is a separate section you add alongside public liability, and some US forms carry an annual aggregate limit where UK policies usually give a limit per occurrence. If a contract asks for general liability insurance, a UK public liability policy with products liability added is normally what satisfies it.

What happens if a claim is made and I do not have public liability insurance?

You defend and pay the claim yourself. A sole trader or partnership is personally liable, so compensation and both sides legal costs come from personal assets; a limited company pays from company funds and can be wound up if it cannot. Personal injury awards for serious injuries can run to hundreds of thousands of pounds, and the legal costs of defending even an unsuccessful claim are rarely recoverable in full.

Public Liability Insurance for Small Businesses

Public liability insurance for a small business covers the compensation and legal costs you face if a customer, client, visitor or passer-by is injured, or their property is damaged, because of your business activities. It is not required by law, but most commercial leases, client contracts and trade memberships insist on it. In the United States the same cover is called general liability insurance. This guide explains what it covers, how much you need, and how to arrange cover.

General Liability Insurance vs Public Liability: The UK Equivalent

General liability insurance is the American name for what UK insurers call public liability insurance. If an overseas client, an online marketplace or a software platform tells you that your small business needs general liability insurance, a UK public liability policy is the cover to ask for. Two differences are worth knowing: a US commercial general liability form usually bundles products liability into a single policy, whereas in the UK products liability is a separate section normally added alongside public liability; and UK policies usually carry an indemnity limit per occurrence, whereas some US forms are written with an annual aggregate. Neither includes injury to your own staff, claims arising from professional advice, or damage to your own property.

Is There a Minimum Public Liability Insurance for Small Businesses?

There is no statutory minimum, because public liability insurance is not compulsory in the UK. The minimum that matters is the one written into your lease, your client contracts or your trade-body membership. In practice 1 million pounds is the lowest limit most insurers offer, 2 million is the most common contractual floor, and 5 million is the usual requirement from local authorities, housing associations, schools and larger commercial clients. Read the insurance clause in every contract you work under and take the highest figure as your minimum.

Cover is subject to underwriting, insurer terms and acceptance. Policy limits and exclusions apply.