How much is public liability insurance?

Pubic liability costs around £120 a year for a typical UK small business. But since quotes depend on many factors, prices can be very different from one business to the next. Ultimately, the cost will depend on the turnover of your business, the work you do, your location, previous claims history, and many other factors. These factors together paint a picture for an insurer regarding the risk they could face by providing insurance, and therefore the premium. 

In fact, the risk profile of a business is so variable that the cost of public liability insurance can be 10X to 20X more expensive from one business to the next. For example, an accountant can easily find public liability quotes for under £100, while a building company will pay hundreds of pounds, if not more. Accountants are not likely to be responsible for an accident that causes personal injury to someone, however, a building site is ripe with dangerous tools and situations. 

A piece of debris could fall from height onto someone, a piece of scaffolding could fall, a welding torch could burn someone, a customer could step on a sharp tool left on the ground, someone could trip and fall on a pile of rubble, etc. The chance of injury or damage is seemingly endless in the world of construction, so these types of businesses will pay more for public liability insurance than less risky business endeavors.

And, of course, the amount of cover you desire will have an impact on the price of your public liability insurance. Higher limits cost more. However, it’s usually the first £1 million of protection that costs the most, with additional coverage costing less and less per £1 million. That is, £5 million of cover will much less than 5X the cost of a £1 million policy. This pricing structure makes it easier to get a higher level of coverage without breaking the bank if you need it. And it makes sense that that the first £1 million is the most expensive since all claims would tap into that coverage but only very serious and significant claims would require using limits beyond this amount. 

If you’re wondering how much is public liability insurance for your business, the best way to get an answer is to get some quotes. Ultimately, your public liability insurance rates will depend on how an insurer assesses the risk presented by your business, so the only way to know for sure how much it will cost is to submit your information and get prices.

What does public liability insurance cover?

Public liability insurance covers situations where a person is injured or their property is damaged in an event linked to a business. This could mean an accident that occurs at a business premise, or even when a business is working off-site, such as at a client’s home or a public event. 

For example, if a customer slips on a wet floor and is injured in a fall they could bring legal action against a business, claiming the business was negligent for not mopping up, providing sufficient mats or ‘wet floor’ signage, depending on the situation.

It covers two primary types of expenses associated with these types of third-party personal injury or property damage claims:

  • Legal expenses. The cost to defend against a claim, even a frivolous claim. Covers solicitor fees, court fees, etc.
  • Compensatory payments. Amounts the business is found liable to pay if they are shown to have been negligent.

How much is product liability insurance?                                     

Product liability insurance is usually sold together with public liability insurance, at an average all-in cost of around £120 a year for a small business. Of course, premiums will vary from one business to another. Many factors can play a role in determining the quote offered by an insurer. And when it comes to product insurance, the product a business makes, designs, repairs or sells can have a bearing on their product liability insurance rate. 

For example, a toy designer and manufacturer might pay a higher premium than a bookmaker, because a fault in a toy can have a larger negative outcome than a faulty book. For example, a toy made with parts that are not designed or secured sufficiently well could become a choking hazard to a child. In the case of child injury, a lawsuit could result in quite a significant award being granted. Whereas a bookseller is less likely to be sued for negligence that results in personal injury.

In summary

To save money on public liability insurance, with or without product liability, be sure to compare prices with more than one insurer before committing. You can get prices through a comparison site, which can save you time as you only need to fill out one quote form, as well as through business insurance brokers and insurance companies that sell business cover directly to their customers.