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Is Public Liability Insurance a legal requirement?

When setting up a small business, it’s fair to say that insurance is probably one of the last things on your mind. However, if clients or members of the public suffer from accidents that arise in your business environment, you are prone to being held liable. Without public liability insurance, this can leave you vulnerable to expensive compensation claims. 

What’s more, independent tradesmen may also find that, as time goes on, they want to expand into a small firm and employ more workers as they grow their clientele. When this is the case, in the process of evolving from tradesman to a small company, your public-facing risks increase as you buy more equipment, transportation and supplies.

Regardless of the care you might take to cope with hazards and ensure that your working environment is safe and secure, human error and sheer chance are facts of life. With a comprehensive insurance policy for your chosen industry, for instance, roofer’s insurance for contractors, you will receive public liability cover as part of your policy package. While this is not strictly speaking a legal requirement, plenty of businesses will make it part of their insurance plan, and this article will explore exactly why this is the case.

What is public liability insurance?

Public liability insurance protects business owners from the costs of any eventual legal proceedings that occur because of personal injury, loss of or damage to property, or even the worst-case-scenario: death. If a claim does become a legal matter, public liability will cover the compensation you are required to pay. 

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There is often confusion between this policy and professional indemnity cover, as both are concerned with risks that happen while at work. However, professional indemnity insurance is slightly different, and protects against compensation claims that arise as a result of your professional advice or recommendations. Examples of this include negligence, the loss of documents or data, third-party financial losses, defamation, and the breach of copyright and/or confidentiality. 

What causes public liability claims?

A tradesman’s business involves interacting with many people and managing a lot of risk as a fundamental part of your operation. Public liability insurance is often associated with accidents that happen on a physical premises, but the risks that are entailed from visiting clients’ offices or homes should not be overlooked either. This form of insurance policy guards against the far from unusual circumstance in which someone else decides to file a claim against your business after an unanticipated accident, resulting in costs that could cause financial ruin. 

Blunders and slip-ups are hardly rare, and even an exhaustive level of thoughtfulness put into avoiding hazard will be insufficient for Murphy’s Law (that’s the sophisticated name for sod’s law). This is especially true in the busy, sometimes high-pressure environments of construction and other forms of skilled work. 


Injury-related claims entails both incidents when a customer, supplier or member of the public injures themselves on your premises, or during any off-site activities organised by your business. For instance, customers may slip or trip on surfaces that are wet or uneven and be entitled to compensation. 

Property damage

You may also damage a client’s property accidentally, such as by dropping equipment on their professional or personal belongings when working on a commercial site. A public liability cover will protect you from the associated costs of compensation for these kinds of claims.

Is public liability insurance legally required for my business?

Unlike employers’ liability insurance, which covers claims related to illnesses and injuries sustained by employees during working hours, public liability cover is not a legal requirement. However, its usefulness cannot be overstated, as the risks associated with public liability arise from everyday circumstances. 

It’s also a regular occurrence for commercial sites to insist upon contractors providing proof of their public liability insurance. Some individual clients may also want to know that you have public liability during the hiring process, so possessing it can be just as much about acquiring new business as risk management.

More to the point, not having this type of insurance can place your business at risk of a hefty payout that will leave you struggling or even bankrupt. So, even though it might not be required by law, every tradesperson should take out this cover.

How much cover do I need?

The level of public liability insurance you require depends on your exposure to risk. Usually, the amount of cover ranges from between £1 million and £10 million. Relevant trade bodies for your industry may also demand a base level of public liability. For instance, the APHC (Association of Plumbing and Heating Contractors) requires its membership to hold £2 million in public liability protection. Sole traders tend to be nearer the bottom of the scale, whereas most building companies operating in public spaces will need a figure nearer to the £10 million mark.

The amount is also influenced by, for one, the number of people that interact with your business, and the amount of potentially dangerous equipment you use, as well as any previous claims you may have faced. If you want to find out more about how much this kind of policy costs, get in touch with us for a chat and a quote.

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