Understanding public liability insurance

Understanding the ins and outs of public liability insurance doesn’t need to be complicated. Learn the lingo with our easy guide.

Safety and insurance

11 June 2021

When you’re a hard-working business owner, the last thing you want to do is translate complicated insurance jargon and confusing terminology to find the right cover. 

We think choosing the insurance that’s right for you should be straightforward, not stressful. That’s why we’ve taken things back to basics and answered the most common questions people have about public liability insurance.

Think concise detail over long-winded definitions. Plain English over jargon. Clarity over complexity. So, make sense of public liability insurance with our guide and get back to what you do best: working hard for your customers.


What is public liability insurance?

- It covers the cost of legal fees and compensation if a customer or member of the public makes a claim against your business.

Public liability insurance could pay for the damages and legal costs when someone makes a claim against your business. If someone is accidentally injured in your workplace, or if their property is accidentally damaged due to your business’ activities or because of the products you supplied, your business could be responsible in law.

So whether it’s a small slip or a serious accident that could wreak havoc on your bank balance, public liability insurance gives you the extra peace of mind you need.


Why do I need public liability insurance?

- To protect yourself from accidents and to open yourself up to more business (certain customers require public liability insurance).

Risk comes part and parcel with running a business. No matter how safety-conscious you are, accidents can happen to anyone. And when they do, you want to make sure you’re covered. That’s where public liability insurance can help.

But public liability insurance isn’t just about protecting your business against the accidental missteps of the past and present. Some of your current and future customers may require businesses to have public liability before signing contracts.

AXA provides proof of public liability cover, so having this cover in place might prove that your business is professional and responsible, which could help your business gain this work in the future.


Who needs public liability insurance?

- Any business or sole trader who interacts with the general public or other businesses could benefit from public liability insurance.

Public liability insurance is for any business that sells a product, provides a service or undertakes a trade. This can include shop owners, tradespeople, professionals or small, home-based entrepreneurs.

So if your business interacts with the public in any way, then public liability insurance should be on your radar. And although it isn’t a legal requirement, the security public liability insurance can provide lets you concentrate on keeping your business going without the extra worry of a compensation claim or legal fees.

Many small businesses take out public liability, but if you’re not sure if you need it , check out AXA’s Business Insurance Wizard.

Do I need public liability insurance?

AXA’s Business Insurance Wizard is an online tool that tells you what insurance your business might need. All you need to do is answer four quick questions about you and your business and you’ll see the results instantly.

When would my business need public liability insurance?

- If someone made a claim against your business it would cover the legal fees and compensation costs.   

Say you accidentally spill a cup of coffee over a client’s laptop and destroy their strategy documents for the year ahead. Or you forget to put a wet floor sign down and a customer takes a nasty tumble on a floor you’ve just cleaned. Both are examples of businesses failing to provide safe environments for people which could result in a claim.

Accidents come in many shapes and sizes, and without public liability insurance, the associated compensation costs and legal fees would come directly from your business, which could be financially devastating. Find out more about public liability claims on our Making a Claim page.


Is public liability insurance a legal requirement?

- No, but you might need it for certain customer contracts.

While public liability insurance isn’t a legal requirement, it’s not something you’ll want to overlook if your business interacts with the public. Plus, you might find that certain customers will want you to have public liability insurance before any money is exchanged.


How much public liability insurance do I need?

- It depends on the type and size of your business you run.

When choosing your level of cover, it’s important to consider the size of compensation demands your business could potentially face.

With AXA, you get up to £5 million of cover for compensation payments and the costs of defending a claim. You can also get 50 days’ free cover for temporary employees and £250 court attendance fees per day. AXA also gives you access to our 24-hour legal helpline.

Plus, we understand that there’s no business quite like yours, which is why we offer a range of optional extras so you can choose the flexible, tailored protection you need.


How much does public liability insurance cost?

- It depends on the level of cover you need which is based on the type and size of your business.

Public liability insurance with AXA starts from just £62 a year* – a small price to pay for the protection you need and the peace of mind you want.


Where can I get public liability insurance?

- Most of the major business insurance providers offer public liability, including AXA.

With AXA, getting public liability insurance couldn’t be simpler. You can get a quote online and build your own tailor-made policy to meet your needs. Or, if you’d prefer, give us a call on 0330 159 1520 and get a quote from one of our experienced advisors who’ll give you the price that’s right for your business.

Still on the fence deciding if public liability insurance is right for your business? The average settlement cost can run into the thousands, so ask yourself this simple question: ‘Could I afford to pay this if my business was sued and I didn’t have public liability cover under my belt?’. If the answer is no, then public liability insurance could be something to consider.

Public liability insurance from £63*

Running a business is hard work. That’s why we’re doing all we can to make insurance easier. Get a Public Liability insurance quote from as little as £63* with AXA.

*10% of our customers paid this or less between January and March 2024.