Public liability insurance for self-employed people: your essential guide

Whether you're a freelance graphic designer, a tradesperson or an online coach, if you're self-employed in the UK, having public liability cover is an essential way to protect your business, providing a safety net for unexpected and serious incidents that could otherwise lead to significant financial loss.

Public liability is a type of insurance in the UK that's designed to protect businesses if a member of the public makes a claim against them due to personal injury or damage to property caused by their business activities.

In this guide, we will break down the fundamentals of public liability insurance for self-employed workers, including what it covers, who needs it, and additional cover you should consider if you're self-employed.

Are you self-employed and looking for public liability insurance to protect your business? Get in touch with us! Our team of experts can help you find tailored cover to suit your business needs.

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Do I need public liability insurance if I'm self-employed?

While public liability insurance isn't a legal requirement for businesses in the UK, it is highly recommended for businesses that interact with customers, clients, or the general public, whether on their premises or elsewhere.

If you work for yourself and your business activities involve interacting with the general public, you're exposed to significant risks.

In any field of work, there's always the potential to damage someone's property or cause injury or even death. Let's look at a few examples where you could be found liable:

• If you're a mobile hairdresser who visits clients' houses, and you accidentally spill hair dye on a client's new carpet, you could be held personally liable for the cost of replacement or cleaning. Without insurance, all legal fees and compensation payouts would come directly from your pocket.
• If you're a builder, and you accidentally rupture a water pipe while working at a clients' property, causing extensive flooding, you could be held liable for the repair costs. Without public liability insurance, you'd have to cover these costs, plus your legal fees, yourself. 

Self-employed public liability insurance is particularly vital for tradespeople, as they face higher risks associated with injuries or damages caused during their work.

In essence, without public liability insurance in place, any claim made against you by a member of the public for injury or property damage could seriously jeopardise your business and personal finances.

What does public liability insurance cover?

Public liability insurance protects your business by covering legal fees and compensation costs if a claim is made against your business involving injury or death caused by your business activities, as well as damage to third-party property. This includes:

• Accidental bodily injury 
• Accidental death
• Accidental damage to property 
• Total loss of property

Depending on your coverage, your insurance policy may also include cover for events you organise, though it may be worth taking out events insurance in this case.

Find out more here: Public liability insurance for events: what you need to know

Having public liability insurance can also be beneficial for business partnerships, as it demonstrates a commitment to safety and accountability.

Some organisations may even require proof of coverage before working with you. For example, local councils often require a minimum cover level of £5 million before awarding contracts.

What does public liability insurance not cover?

Public liability insurance won't cover every type of claim. Below are five common exclusions:

1. Employee injuries

If an employee becomes ill or sustains an injury while working for your business, public liability insurance does not cover compensation claims or legal fees.

You'll need employers liability insurance for this, which is a legal requirement in the UK if you employ staff, whether you're self-employed, a sole trader or own a limited company.

2. Your own property and equipment

Public liability insurance won't cover damage to your own building, equipment, or contents, even if the damage is caused by your business activities. Instead, you'll need to look into tools and equipment cover.

3. Personal injury

If you become injured from your own business activities, you won't be covered under your public liability policy. Instead, you'll need a separate health insurance policy to cover this risk.

4. Professional negligence

Public liability insurance does not cover legal claims arising from errors in your professional advice, services, or faulty workmanship that result in financial loss for a client.

5. Criminal acts

Public liability insurance won't cover any damage or injuries that occur while you're breaking UK laws or committing a crime.

How much does public liability insurance for self-employed people cost?

There is no 'one size fits all' cost for public liability insurance; the amount you'll pay for your insurance cover depends on several factors:

• Your occupation / nature of your business - the riskier your business activities are, the more you'll pay for insurance due to increased potential for claims. Builders would typically pay more than an online-only retail business, for example.
• Claims history - any previous claims you've made can influence how much you pay for public liability insurance.
• Size of business - generally speaking, larger businesses will cost more to insure. If you employ staff, for example, this could increase your premium.
• Additional cover - any extra cover you choose to add to your policy will increase your premium.

What other types of insurance are recommended for self-employed people?

Aside from public liability insurance, self-employed people might want to consider several other types of insurance to protect their business in the worst-case scenario.

Many insurance providers offer specific self employed insurance or sole trader insurance, which is essentially business insurance tailored for those who work for themselves.

It consists of several individual cover types combined into one package. Aside from public liability insurance, self-employed insurance policy usually provides cover for the following types of insurance:

• Employers liability insurance - this type of insurance is legally required if you employ staff (or labour-only subcontractors), whether you're self-employed, a sole trader or own a limited company. It protects you financially should an employee make a claim against you for an incident that causes personal injury or property damage.
• Professional indemnity insurance - If you provide professional services or advice, such as working as an accountant or financial advisor, this type of insurance covers compensation costs if your advice leads to financial loss or reputational damage for a client.

Additional types of insurance for self-employed people

You might also want to consider some of these optional covers, depending on the nature of your business.

If you decide to take out a tailored self-employed insurance policy, some of these additional cover options might already be included, so make sure you check with your insurer first.

Contents and office equipment insurance

Contents and office equipment insurance covers fittings and fixtures as well as operational equipment inside your business premises against damage, loss, or theft. It essentially protects the tangible assets that furnish and operate your workspace.

Business equipment insurance

Covers the cost of repairing or replacing essential items your business uses, like laptops, machinery, or specialised tools, if they are lost, stolen, or accidentally damaged. It protects both equipment kept on your premises and often portable items used off-site.

Tools and equipment cover

Tools and equipment insurance covers the cost of repairing or replacing your trade tools and key equipment if they are lost, stolen, or damaged.

Personal accident cover

Personal accident insurance is a useful safety net for self-employed individuals that aren't entitled to sick pay, protecting you financially until you recover from any injury or illness that leaves you unable to work.

Business buildings insurance

Also known as commercial property insurance, business buildings insurance covers the cost of repairing or rebuilding your business premises if they are damaged or destroyed by events like fire, flood, or storms. It typically covers the physical structure of the building and its permanent fixtures.

Legal expenses cover

Legal expenses insurance covers legal costs like solicitor fees and court expenses for business-related legal action taken against you (e.g., disputes with suppliers or clients).

Cyber and data insurance

Cyber and data insurance protects you against the consequences of a cyber attack or data breach, offering technical, legal, and PR assistance.

Hired-in plant insurance

Hired-in plant insurance provides cover for theft, damage or loss of hired plant machinery, such as drilling units or excavators.

Own plant insurance

Own plant insurance provides cover for theft, damage or loss of your own plant machinery, such as excavators or forklifts.

Public liability insurance for self-employed individuals: 9 key takeaways

1. While self-employed public liability cover isn't legally required in the UK, it is highly recommended if your business activities involve interacting with the general public.
2. It's particularly important for tradespeople, as they face higher risks at work.
3. Aside from public liability cover, self-employed persons who operate a small business are strongly advised to have employers’ liability insurance (if you employ staff or labour-only subcontractors) and professional indemnity insurance.
4. Professional indemnity insurance covers compensation costs if your advice leads to financial loss or reputational damage for a client.
5. Insurers often offer self-employed insurance or business insurance packages, which offer tailored cover, combining several types of insurance into one policy.
6. Common exclusions of public liability insurance include employee or personal injuries, your own property and equipment, professional negligence, and criminal acts.
7. How much you'll pay for your public liability insurance policy depends on several factors such as size and nature of business, claims history and any additional cover you choose to add.
8. If you work from home, you may still need public liability insurance; for example, if clients visit your home, you deliver products or have goods delivered to your home, or if you need to visit a client's premises for work.
9. There are many optional cover types you can add to your policy depending on the nature of your business. These could include tools and equipment, cyber and data, business buildings, or personal accident cover.