Is it a legal requirement to have public liability insurance?

If you operate as a builder or work in the construction industry, you may want to consider certain types of insurance to operate legally and win certain contracts. That said, it’s not always easy to work out what you need and why.

What is public liability insurance?

It is a type of insurance that is designed to protect you and your business in the event something your business does causes injury to someone or damages their property. The victims could be members of the public or clients.

The types of incidents covered can range from someone twisting their ankle to life-changing injuries or even death.

If you or your business is found to be at fault, your public liability insurance will pay the damages, compensation, and legal costs involved.

Is it a legal requirement to have public liability insurance?

While there are certain types of insurance you are required to have, public liability insurance is not one of them. However, you may be contractually required to have it.

Many larger companies and public sector organisations may require you to have certain levels of public liability insurance as a term of your contract with them. If you don’t have it, you either won’t win the contract or could be in breach of contract.

Are there any other circumstances when I need public liability insurance?

If you want to join a trade association, you may find that having public liability insurance is a term of membership. It is generally seen as an important part of demonstrating that you are a respectable business.

Why is it so important?

Without it, a successful claim against you could financially cripple your business. 
In addition to the worry and time needed to deal with a claim, the amount of damages awarded can total in the tens or hundreds of thousands of pounds – perhaps even more.

Without insurance, you or your business will have to pay. If you can’t, your business and assets could be at risk.

Does it matter how my business is set up?

It doesn’t make a difference whether you are a limited company, partnership or self-employed – the reasons for having public liability insurance are the same. It is an essential part of your business.