Commercial Insurance – the basics: Public Liability
Public Liability is one of the most basic types of liability cover available to organisations. This cover provides protection against claims brought by third parties for property damage or personal injury resulting from your negligence.
Classic examples include someone tripping over unsecured cables you’ve left out, or a roof tile falling and causing injury. The policy covers both damages awarded by a court and the defence and investigation costs involved. Often, claims are settled out of court, and this cover extends to those settlements as well.
Is Public Liability Insurance a Legal Requirement?
Public Liability insurance isn’t a legal requirement for most organisations, but it’s a sensible and often essential purchase. It can usually be arranged alongside other covers—such as property and money insurance—as part of a package.
While we refer to this as Public Liability Insurance, it’s also sometimes called General Liability Insurance. These policies often include Products Liability, and in some cases can also extend to abuse cover, libel, and slander.
This is a key type of liability cover that protects your organisation from potentially significant financial loss.
What to Consider When Requesting a Quote
When approaching brokers for a Public Liability quotation, you should consider the following:
Contractual Requirements
Although you’re generally free to choose a level of cover that suits your risk appetite—typically £1M, £2M, or £5M—some contracts may stipulate specific limits.
Examples include:
Charity grant applications
Tender processes
Commissioned service agreements
You may need to provide evidence of appropriate cover when submitting these documents.
Aggregate Limit
Public Liability cover is provided on an “Any One Claim” basis, meaning the limit applies per individual claim. However, Products Liability cover often has an aggregate limit, meaning the total cover available is capped annually. It’s important to understand this difference, as multiple claims could exhaust the annual limit.
Turnover and Income
Premiums are usually based on your turnover or income. You’ll need to provide:
An estimate for the forthcoming year
Figures for the current or most recent financial year
A breakdown of income, especially where revenue is generated overseas or through higher-risk services
Risk Management Practices
Your approach to risk management can significantly influence your premiums. Consider whether you have:
A Health & Safety policy
Documented risk assessments
A safeguarding policy
Regular DBS checks
Having these measures in place not only strengthens your protection but can also lower your insurance costs.
How We Can Help
Do you currently hold Public Liability insurance? Has this article raised any questions?
If so, get in touch with us—we’d be happy to help.
We specialise in arranging commercial and charity insurance policies, ensuring you have the right protection for your organisation.
For more guidance, you can also download our Insurance Buyers’ Guide.
