FAQs: Public liability insurance


What is public liability insurance?

Public liability insurance covers the holder for compensation claims made by people or organisations who suffer damage as a result of their work. For example, if a shopkeeper or a member of their staff leaves boxes stacked in front of a door and a customer trips over them, public liability insurance may cover the business if the customer is injured and claims compensation.

Does public liability insurance cover incidents that occur outside business premises?

Yes, public liability insurance can cover damage caused outside the workplace or business premises. Examples include where a support worker sent by an IT company to a client site damages a server by spilling tea on it; or where a self-employed carpet fitter breaks ornaments belonging to a client when bringing in a carpet.

What is the difference between public liability insurance and professional indemnity insurance?

Professional indemnity insurance is similar to public liability insurance except that it covers situations where damage is caused specifically as a result of a breach of professional duty. For example, if an architect failed to plan a building properly, resulting in the work having to be demolished and started again, the appropriate insurance for compensation costs would normally be professional indemnity insurance rather than public liability insurance.

Is public liability insurance mandatory?

There is no requirement for businesses or self employed workers to have public liability insurance. However, many organisations require contractors working for them to hold public liability insurance, often to a particular level of coverage. This is typically the case with government and local authority contracts.

Is there anything that public liability insurance does not cover?

The extent of compensation claims covered by public liability insurance depends on the policy in question. However, some kinds of claim are excluded in all or most cases. These include claims that arise as a result of criminal charges against the policy holder or defective products made by them, or claims made by employees. These last two are normally covered by product liability insurance and employers’ liability insurance respectively.
If you would like to obtain legal advice on public liability insurance, Caven can put you in touch with a local specialist solicitor free of charge. So, if you have any questions or would like our help in finding local solicitors please call us on 08001 221 2299 or complete the web-form above.
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