What is public liability insurance, and who legally needs it?

Reviewed by: Lee Evans
Business & Leisure Insurance Expert

Written by: Katie Gawley
Insurance Content Writer

Fact-checked by: Quotezone Editorial Team

This content follows our Editorial Guidelines

Last Updated: 13 October 2026
Read time: 14 min

If a client, council or venue has just asked for your certificate, this guide explains what public liability insurance pays for and what it leaves out. It lists the licences that require it, the permissions and contracts that ask for it, and how it differs from employers’ liability.

Jump to information on:

• What is public liability insurance?
• Does the law require it?
• Who asks for it when the law does not?
• Public liability vs employers’ liability
• What the policy pays for
• Common exclusions
• Add-ons and what each one is for
• How much cover do you need?
• What affects the price
• FAQs

What is public liability insurance?

It covers claims made against your business by members of the public, or other businesses, for injury or damage your work causes. The Association of British Insurers says it pays compensation for personal injuries, loss of or damage to property, and death.

“The public” means almost anyone you deal with, from customers to people passing where you work. The same guidance names the group left out: employees, temporary staff, students and people on work placements. Claims from them belong to employers’ liability insurance.

In England and Wales, the Occupiers’ Liability Act 1957 gives anyone who occupies premises a “common duty of care” to keep visitors reasonably safe. Northern Ireland has a matching 1957 Act of its own, and Scotland has the Occupiers’ Liability (Scotland) Act 1960.

If a visitor says you fell short and they were hurt, a public liability policy would normally respond, subject to its terms.

Does the law require it?

Not for most businesses. The Health and Safety Executive puts it plainly: “While public liability insurance is generally voluntary, employers’ liability insurance is compulsory.” There are exceptions, and if your work is one of them, the cover is a condition of trading.

Activities where the law requires it

The rules below apply in England unless stated otherwise.

• On the compulsory Childcare Register, Ofsted’s requirements for childminders say: “You must have public liability insurance.”
• Nannies do not have to register with Ofsted. Those who choose to are bound by the same words in Ofsted’s nanny requirements.
• A licence to hire out horses requires “a valid certificate of public liability insurance”, under Schedule 5 of the 2018 animal activities licensing regulations. Horse hire as a farm sideline is covered in our guide to what farm insurance covers.
• Keeping or training animals for exhibition needs valid cover too, under Schedule 7 of the same regulations.
• In England, Scotland and Wales, keeping a dangerous wild animal needs a licence under section 1 of the Dangerous Wild Animals Act 1976. It depends on insurance against “liability for any damage which may be caused by the animal”.

In Northern Ireland, the nibusinessinfo guidance for Northern Ireland businesses says the cover is generally not compulsory, but horse riding businesses must have it. Childcare and animal licensing rules in Scotland and Wales are set separately, so check with the regulator or licensing body there.

Who asks for it when the law does not?

Councils and clients, mostly. If you need someone’s permission to trade, work on their site or use their space, a certificate is often part of the deal.

Councils granting permission

A pavement licence in England lets a café or pub put tables and chairs outside. Under section 2 of the Business and Planning Act 2020, the application must include “such evidence of public liability insurance … as the authority may require”.

Building work that occupies part of the road in England or Wales needs a road occupation licence. GOV.UK says you “must also have a public liability insurance certificate”. Some other council permissions ask for one too, so read the form first.

Authorisation schemes

Some schemes set the limit too. The Office for Zero Emission Vehicles (OZEV) authorises representatives who subcontract chargepoint installs and claim grants for installers. Applicants must provide a “public liability insurance certificate (minimum of £2 million indemnity)”.

Clients, contractors and venues

The people paying you are free to make cover a condition of the work. A main contractor may want your certificate before you start on site. Venues, event organisers and commercial landlords sometimes write a minimum into the booking or lease, so read the insurance clause before you sign.

Public liability vs employers’ liability

They’re separate covers, and in Great Britain employers’ liability is the one the law makes compulsory. GOV.UK’s employers’ liability page says you must get it “as soon as you become an employer”, for “at least £5 million”, from an authorised insurer.

You can be fined £2,500 for every day you’re not properly insured, and £1,000 for not displaying your certificate or showing it to inspectors. The daily fine comes from section 5 of the Employers’ Liability (Compulsory Insurance) Act 1969.

The £5 million minimum is set by regulation 3 of the 1998 Regulations, and it covers claims arising from any one occurrence. If you take on staff, employers’ liability insurance is a separate policy to compare.

Exemptions from employers’ liability

GOV.UK names two exemptions. You don’t need the cover if you only employ a family member, from the relations it names, or someone based outside England, Scotland and Wales. Separately, a 2004 amendment exempts a company with only one employee who also owns 50% or more of its issued share capital.

Our guide to what business insurance you actually need sets out the other covers some businesses must hold by law, such as motor insurance.

What the policy pays for

It pays when someone outside your business is hurt, or their property is damaged, because of your work. Going by the definition above and Quotezone’s public liability page, a policy is designed to cover:

• injury to or death of a third party
• loss of or damage to their property
• the resulting legal expenses and compensation payments

NHS charges are another cost. In Great Britain, section 150 of the Health and Social Care (Community Health and Standards) Act 2003 applies when someone pays injury compensation. The payer becomes liable for the linked NHS hospital and ambulance charges. Check that your policy covers those charges as part of a claim.

Where you work matters. Quotezone’s product page says a policy would usually cover you at customers’ locations and other venues as well as your own premises. Check your schedule against the places you actually work.

Common exclusions

Exclusions depend on each policy’s wording, so treat the points below as things to check rather than a fixed list.

• Injury to your employees: the industry definition above leaves employees out, so their claims go to employers’ liability.
• Damage to your own property and tools is a separate matter, because the policy pays for damage to other people’s property. Quotezone’s guide on whether van insurance covers your tools explains where tools can fall.
• Professional mistakes or design errors: a client’s financial loss from your recommendations or designs is a professional indemnity insurance matter, not a public liability one.
• For faulty products you sell or supply, Quotezone’s product page lists product liability as a separate add-on, so check your wording for whether it is included.
• Unregistered childcare: Ofsted’s guidance on childcare on domestic premises warns that operating unregistered “may also invalidate your public liability insurance”.

Work outside the trade you declared is another point to check. Your schedule names the business activities the insurer agreed to cover.

Add-ons and what each one is for

Quotezone’s public liability page names three popular add-ons that you can bundle with the core policy.

Employers’ liability is the one with a legal duty behind it, covered in the section above. Product liability is for businesses that sell physical goods: it can cover claims if a faulty product injures a member of the public.

Directors and officers cover protects senior managers against liability claims alleging the business was mismanaged and caused third parties a loss. The product page also says add-ons “can have a significant impact on your insurance premium”, so you may want to add only the ones your work calls for.

How much cover do you need?

Where a contract, licence or booking form names a figure, that is your starting point.

OZEV asks authorised installer representatives for at least £2 million. Elsewhere, read each insurance clause and note the figure. When different clients ask for different amounts, the highest one sets your minimum.

The limit also moves the price. Quotezone’s product page lists “the amount you’d like to be covered for” among the things that affect your premium.

What affects the price

Quotezone’s product page does not publish an average price. It says the nature of your business has “a significant impact on the cost”. Your location, the amount of cover and any past public liability claims also feed into the premium.

The industry body’s definition page adds the number of people you employ and your claims history. Comparing quotes for your own trade is the way to see a real figure.

You might also need

• Employers’ liability insurance: compulsory in Great Britain once you employ someone, unless an exemption applies.
• Professional indemnity insurance: for claims that your recommendations, designs or consultancy cost a client money.

Start with the limit your client or council asks for, if they have named one. Then compare public liability quotes from UK insurance providers on Quotezone with one short form.

Providers shown on Quotezone’s public liability page include Broadsure Insurance, Coversure Insurance Services and Brady Insurance. Seopa Ltd, trading as Quotezone, is authorised and regulated by the Financial Conduct Authority.

Public liability FAQs

Do home-based businesses need it?

Not by law, unless your work is one of the licensed activities above, such as registered childminding. The industry definition counts clients and visitors as members of the public. It lists running a business from home, with people visiting for professional reasons, as a reason to consider cover.

Can a client insist on it?

A client is free to make it a condition of the contract, even though the law doesn’t require it. The same goes for a main contractor, venue or landlord. Read the insurance clause before you sign so you know the limit you need, and compare it with the limit on your schedule.

Is it compulsory in Northern Ireland?

Not as a rule; horse riding businesses are the named exception. For employers’ liability, nibusinessinfo’s Northern Ireland guidance sets the same £5 million minimum as Great Britain and fines up to £2,500 a day. It exempts close family members where the business is not a limited company, and a company whose only employee owns 50% or more of its shares.

Sources

1. Association of British Insurers, “Public liability insurance”, https://www.abi.org.uk/policy-and-guidance/general-insurance/business-insurance/liability-insurance/public-liability-insurance. Accessed 13 October 2026.
2. legislation.gov.uk, “Occupiers’ Liability Act 1957, section 2”, https://www.legislation.gov.uk/ukpga/Eliz2/5-6/31/section/2. Accessed 13 October 2026.
3. legislation.gov.uk, “Occupiers’ Liability Act (Northern Ireland) 1957, section 2”, https://www.legislation.gov.uk/apni/1957/25/section/2. Accessed 13 October 2026.
4. legislation.gov.uk, “Occupiers’ Liability (Scotland) Act 1960, section 2”, https://www.legislation.gov.uk/ukpga/Eliz2/8-9/30/section/2. Accessed 13 October 2026.
5. Health and Safety Executive, “Employers’ Liability (Compulsory Insurance) Act 1969: A brief guide for employers (HSE40 rev4)”, https://www.hse.gov.uk/pubns/hse40.pdf. Published December 2012. Accessed 13 October 2026.
6. Ofsted, GOV.UK, “Childminders on the compulsory Childcare Register: Ofsted requirements”, https://www.gov.uk/guidance/childminders-on-the-compulsory-childcare-register-ofsted-requirements. Last updated 1 September 2026. Accessed 13 October 2026.
7. GOV.UK, “Become a childminder or nanny (England)”, https://www.gov.uk/become-childminder-nanny. Accessed 13 October 2026.
8. Ofsted, GOV.UK, “Nanny: Ofsted requirements”, https://www.gov.uk/guidance/nanny-ofsted-requirements. Last updated 1 September 2026. Accessed 13 October 2026.
9. legislation.gov.uk, “The Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018, Schedule 5”, https://www.legislation.gov.uk/uksi/2018/486/schedule/5. Accessed 13 October 2026.
10. legislation.gov.uk, “The Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018, Schedule 7”, https://www.legislation.gov.uk/uksi/2018/486/schedule/7. Accessed 13 October 2026.
11. legislation.gov.uk, “Dangerous Wild Animals Act 1976, section 1”, https://www.legislation.gov.uk/ukpga/1976/38/section/1. Accessed 13 October 2026.
12. nibusinessinfo.co.uk (Invest NI, Northern Ireland guidance), “Public liability insurance”, https://www.nibusinessinfo.co.uk/content/public-liability-insurance. Accessed 13 October 2026.
13. legislation.gov.uk, “Business and Planning Act 2020, section 2”, https://www.legislation.gov.uk/ukpga/2020/16/section/2. Accessed 13 October 2026.
14. GOV.UK, “Road occupation licence for building work”, https://www.gov.uk/find-licences/road-occupation-licence-for-building-work. Accessed 13 October 2026.
15. Office for Zero Emission Vehicles, GOV.UK, “Residential and commercial chargepoints: become an authorised installer”, https://www.gov.uk/guidance/residential-and-commercial-chargepoints-become-an-authorised-installer. Last updated 1 April 2026. Accessed 13 October 2026.
16. GOV.UK, “Employers’ liability insurance”, https://www.gov.uk/employers-liability-insurance. Accessed 13 October 2026.
17. legislation.gov.uk, “Employers’ Liability (Compulsory Insurance) Act 1969, section 5”, https://www.legislation.gov.uk/ukpga/1969/57/section/5. Accessed 13 October 2026.
18. legislation.gov.uk, “The Employers’ Liability (Compulsory Insurance) Regulations 1998, regulation 3”, https://www.legislation.gov.uk/uksi/1998/2573/regulation/3/made. Accessed 13 October 2026.
19. legislation.gov.uk, “The Employers’ Liability (Compulsory Insurance) Amendment Regulations 2004, regulation 2”, https://www.legislation.gov.uk/uksi/2004/2882/regulation/2/made. Accessed 13 October 2026.
20. Quotezone, “Public liability insurance”, https://www.quotezone.co.uk/business-insurance/public-liability-insurance. Last updated 22 December 2025. Accessed 13 October 2026.
21. legislation.gov.uk, “Health and Social Care (Community Health and Standards) Act 2003, section 150”, https://www.legislation.gov.uk/ukpga/2003/43/section/150. Accessed 13 October 2026.
22. Ofsted, GOV.UK, “Childcare on domestic premises”, https://www.gov.uk/guidance/childcare-on-domestic-premises. Last updated 1 November 2024. Accessed 13 October 2026.
23. nibusinessinfo.co.uk (Invest NI, Northern Ireland guidance), “Employers’ liability insurance”, https://www.nibusinessinfo.co.uk/content/employers-liability-insurance. Accessed 13 October 2026.
24. legislation.gov.uk, “Limitation Act 1980, section 11”, https://www.legislation.gov.uk/ukpga/1980/58/section/11. Accessed 13 October 2026.
25. legislation.gov.uk, “Limitation Act 1980, section 2”, https://www.legislation.gov.uk/ukpga/1980/58/section/2. Accessed 13 October 2026.
26. legislation.gov.uk, “Prescription and Limitation (Scotland) Act 1973, section 17”, https://www.legislation.gov.uk/ukpga/1973/52/section/17. Accessed 13 October 2026.
27. legislation.gov.uk, “The Limitation (Northern Ireland) Order 1989, Article 7”, https://www.legislation.gov.uk/nisi/1989/1339/article/7. Accessed 13 October 2026.
28. Financial Conduct Authority, FCA Handbook, “DISP 2.8 Was the complaint referred to the Financial Ombudsman Service in time?”, https://handbook.fca.org.uk/handbook/disp2/disp2s8. Accessed 13 October 2026.
29. Financial Conduct Authority, FCA Handbook, “DISP 2.7 Is the complainant eligible?”, https://handbook.fca.org.uk/handbook/disp2/disp2s7. Accessed 13 October 2026.
30. Financial Conduct Authority, FCA Handbook Glossary, “micro-enterprise”, https://handbook.fca.org.uk/glossary/G2623. Accessed 13 October 2026.
31. Financial Conduct Authority, FCA Handbook Glossary, “small business”, https://handbook.fca.org.uk/glossary/G1095. Accessed 13 October 2026.

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.