What does public liability insurance actually cover?

Claims made against your business by third parties for bodily injury or damage to their property arising from your business activities, plus the legal costs of defending or settling those claims.

Does public liability cover my own tools and equipment?

No. Your own property is covered by tools, stock, contents or equipment insurance. Public liability only responds to other people's injury or property damage.

Does it cover damage to the thing I was working on?

Often not, or only in part. Many policies exclude damage to the specific property you are working on, so trades frequently need to check that wording carefully or arrange a policy that extends to it.

Is product liability included?

Sometimes it is bundled in, sometimes it is a separate section. If you make, supply or install goods, confirm product liability is present and at what limit.

BUSINESS GUIDE

What does public liability insurance cover?

Three things: injury to other people, damage to their property, and the legal costs of dealing with the claim. Everything else needs a different section of the policy — and that is where most misunderstandings start.

Last reviewed August 2026

Injury to third parties

If a customer, client, visitor or passer-by is hurt because of your business activities, this is the part that deals with compensation and legal defence. It applies at your premises and at other people's, and typically follows you wherever you work in the UK.

Employees are excluded here on purpose. Injuries to your own staff belong under employers' liability, which is the compulsory cover once you employ anyone.

Damage to other people's property

This covers physical damage you cause to property that belongs to someone else: a client's floor, a neighbour's wall, a landlord's fittings, a customer's vehicle.

Watch for two common restrictions. Property in your care, custody or control may be treated differently, and damage to the actual item you were working on is frequently excluded or limited. Both matter for trades and installers.

Legal and defence costs

Costs are the reason limits look large. Investigating an accident, instructing solicitors and defending a claim can run into tens of thousands even when no compensation is ever paid. Policies cover those costs, generally within or in addition to the limit of indemnity depending on the wording.

What sits outside it

These are the gaps people assume are included and are not.

Your own tools, stock, equipment and premises contents
Injury to your own employees, which is employers' liability
Mistakes in professional advice or design, which is professional indemnity
Faults in goods you supplied, unless product liability is included
Cyber incidents, data breaches and ransomware
Contractual penalties, fines and deliberate acts

How the limit is chosen

The limit of indemnity is the most the insurer pays for a claim or in a period, depending on the basis. In practice it is often set by whoever you work for: main contractors, councils and utilities commonly stipulate a minimum, so the contract decides before you do.

If nothing dictates a figure, the honest question is how large a single incident could realistically be, given where you work and who is around you.

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Common questions

What does public liability insurance actually cover?: Claims made against your business by third parties for bodily injury or damage to their property arising from your business activities, plus the legal costs of defending or settling those claims.
Does public liability cover my own tools and equipment?: No. Your own property is covered by tools, stock, contents or equipment insurance. Public liability only responds to other people's injury or property damage.
Does it cover damage to the thing I was working on?: Often not, or only in part. Many policies exclude damage to the specific property you are working on, so trades frequently need to check that wording carefully or arrange a policy that extends to it.
Is product liability included?: Sometimes it is bundled in, sometimes it is a separate section. If you make, supply or install goods, confirm product liability is present and at what limit.

Keep reading

General information only, written for UK readers. It is not insurance advice and does not take account of your circumstances. Cover Sorted collects your enquiry and passes it to an FCA-authorised insurance specialist. Cover Sorted does not provide quotations, comparisons or recommendations.