Public and product liability explained
What each cover does, how they differ from employers' liability and professional indemnity, and how much cover you may need.
What public and product liability insurance cover
Public liability and product liability insurance cover the claims a business could face from customers, visitors and members of the public. They're often sold together as "public and products liability", and many trade and commercial policies include both.
This guide explains what each cover does, what it doesn't do, how it differs from employers' liability and professional indemnity insurance, and what affects how much cover you need.
At a glance
- Public liability covers injury or damage caused by what you do: your premises, your work or your activities.
- Product liability covers injury or damage caused by something you make, supply, sell, repair or import.
- Neither covers your own staff: injuries to employees need employers' liability insurance.
What is public liability insurance?
Public liability insurance covers your legal liability if someone who isn't an employee is injured, or their property is damaged, because of your business. That could be a customer, a visitor to your premises, a client whose home you're working in, or a member of the public passing your site.
It usually pays compensation you're legally liable for, plus legal costs to defend the claim, up to the limit on your policy.
Examples of public liability claims
Slip in a shop or café
A customer slips on a wet floor and is injured.
Damage in a client's home
A tradesperson damages a carpet or pipework while working.
Trip hazard in public
A passer-by trips over equipment or cables left on a pavement.
Injury at an event
A guest is hurt at an event you've organised.
What is product liability insurance?
Product liability insurance covers your legal liability if a product you make, supply, sell, repair or import causes injury or damage. Examples include a kitchen appliance that causes a fire, food that makes someone ill, or a faulty part that fails and injures someone.
The law: under the Consumer Protection Act 1987, producers may be liable for damage caused by a defective product without the injured person having to prove negligence. Importers bringing goods into the UK and businesses that put their own brand on a product may be treated as the producer, so they carry the same risk as the manufacturer.
What's the difference between public and product liability?
Public liability
Covers injury or damage caused by what you do: your premises, your work or your activities.
Example: A customer trips over a box in your shop.
Product liability
Covers injury or damage caused by something you've made or supplied, often after it has left your hands.
Example: A heater you sold overheats and damages a customer's home.
Many businesses need both. A café needs public liability for customers on its premises and product liability for the food it serves. A builder needs public liability while on site and may need product liability if they supply or fit materials.
Public liability, employers' liability and professional indemnity
These covers are often confused because they all deal with claims against your business. They respond to claims from different people and for different kinds of mistake.
Public liability
Injury or property damage caused by your work or premises.
Who claims: Customers, visitors, clients and the public
Legal requirement: Not by law, but often required by clients, contracts, councils and venues
Product liability
Injury or damage caused by a faulty product.
Who claims: Anyone harmed by a product you made or supplied
Legal requirement: Not by law, but often required by retailers and buyers
Employers' liability
Injury or illness caused by working for you.
Who claims: Your employees
Legal requirement: Usually yes if you employ staff, with a minimum limit of £5m
Professional indemnity
Financial loss caused by a mistake in your advice or professional work.
Who claims: Clients who rely on your advice, designs or services
Legal requirement: Not by law, but required by some professional bodies and contracts
See our pages on employers' liability insurance and professional indemnity insurance.
Do I need public liability insurance?
Public liability insurance isn't a legal requirement in the UK, but businesses that deal with the public or work on other people's property should consider it. Without it, you would have to pay compensation and legal costs yourself. You're more likely to need it if:
- customers or visitors come to your premises
- you work in clients' homes or on their sites
- you run or take part in events, markets or trade shows
- a client, landlord, council or venue asks to see your certificate before you start work.
This applies to sole traders as well as limited companies. Sole traders are personally liable for their business, so a claim could reach your personal assets.
How much public liability cover do I need?
The limit of indemnity is the maximum your insurer pays for a claim. Limits of £1m, £2m, £5m and £10m are common. When choosing a limit, think about:
- What your contracts require: clients, councils and venues often set a minimum limit, so check before you buy.
- The worst realistic claim: a serious injury or a fire in a client's building could cost far more than a minor accident.
- How the limit applies: some policies apply the limit to each claim, others to all claims in the policy year. Product liability is often limited per year.
What affects the cost?
- Your trade or activity: work at height, heat or hot work, and heavy machinery carry more risk than office work.
- Your turnover or wage roll: this gives the insurer a measure of how much work you do.
- The limit you choose: a higher limit usually costs more.
- Where your products are sold: exports, especially to the USA and Canada, may increase the cost or need specific cover.
- Your claims record: insurers usually look at the last three to five years.
What public and product liability insurance usually don't cover
- Injury to your own employees: this needs employers' liability.
- Damage to your own property, tools or stock: this needs property, contents or tools cover.
- The cost of replacing or recalling a faulty product: product liability covers the injury or damage the product causes, not the product itself. Product recall is a separate cover.
- Financial loss from advice or design: this needs professional indemnity.
- Deliberate acts and known problems: claims from damage you caused on purpose, or from problems you knew about before the policy started.
Check your policy: an excess may apply to property damage claims. Cover, limits and exclusions vary by policy, and your policy wording decides what is covered in any claim.
Public liability for your trade
Insurers rate public liability on what you do, and the covers you need alongside it vary by trade. See what's usually covered for:
Builders and construction
Work on site and in clients' homes, where contracts may set a minimum limit.
Electrical contractors
Work in clients' premises, where fire or damage claims may be large.
Food and drink businesses
Products liability for food and drink, plus customers on your premises.
How PIB Insurance Brokers helps
We check the limit you need
We check the limit your contracts ask for before you buy.
We describe your work accurately
So your activities are covered, including work at height, hot work or work abroad.
We look at the wider picture
Whether you also need employers' liability, professional indemnity or product recall cover.
Here when things change
Our team is on hand throughout the policy year for advice, whether your circumstances change or you're not sure what to do next.
For cover options and a quote, see our public liability insurance page.
What our clients say
Reviews from PIB Insurance Brokers clients across the sectors we work with, collected by Reviews.io.
Need public or product liability cover?
Get a quoteFrequently asked questions
Do I need public liability insurance as a sole trader?
It isn't a legal requirement, but many sole traders choose it because a claim could be made against them personally. You're more likely to need it if you work in clients' homes or on their sites, have customers visit you, or have a client or council that asks for it.
Do I have to display a public liability insurance certificate?
No. There's no legal requirement to display a public liability certificate, although clients, councils and venues may ask to see it. The certificate you may need to make available to staff is for employers' liability insurance.
Does public liability insurance cover theft?
Not usually. Public liability covers injury or damage to other people's property caused by your business. Theft of your own tools, stock or equipment needs contents, stock or tools cover.
Is product liability insurance a legal requirement?
No, product liability insurance isn't required by law in the UK. But under the Consumer Protection Act 1987 you may be held liable for injury or damage caused by a defective product you've made, imported or branded, and many retailers and buyers ask suppliers to hold it.