The average UK annual public liability insurance premium costs £761. However, most small businesses and sole traders will pay much less than that and it can be as little as £40 a year.
You can get a quote from Direct Line to find out how much your cover will cost. It offers up to £10m of cover and says 16% of its customers paid £55 or less between March and August 2016.
We calculated the average cost by dividing the size of the public liability insurance market by the number of UK businesses, which equals £761 a year or £63 a month.
Public liability insurance definition
Public liability insurance is not a legal requirement but will protect your business in the event a member of the public is injured or their property is damaged in your premises or as a result of your work in their home. Many companies or events may require you to have it before they will work with you.
It’s available for all businesses including market stalls, shops and food trucks. Public liability is also worth considering if you’re self-employed or a freelancer, for example, a builder, photographer or mobile hairdresser.
However, it does not cover injuries or claims relating to yourself or your employees, you’ll need employers’ liability for that.
Four factors that impact the cost of public liability insurance
|Factor affecting insurance cost||Impact on price|
|Trade or profession||Trades that use lots of equipment or dangerous machinery will cost more to insure|
|Your turnover||The larger the business, the higher the premium is likely to be|
|Whether people visit your business||Prices will be higher for premises with lots of footfall or if the public is at risk from equipment|
|Whether your stall is set up in public||Stalls at private events may cost less to insure than those in markets|
Public liability prices
It’s difficult to provide examples of public liability costs for different jobs because there are so many factors that influence quotes. But here are some starting prices and cover levels:
- Axa says 10% of customers paid £57 or less. It offers up to £5m of cover.
- Direct Line says 16% of customers paid £55 or less. It offers up to £10m of cover.
- Hiscox does not provide starting prices but a quote for a freelance fashion consultant (this job gives an idea of an inexpensive quote) was £50.37 a year. It offers up to £10m of cover.
- PolicyBee does not provide starting prices but a quote for a fashion consultant was £43.80 a year. It offers up to £5m of cover.
What you need to know when you get a quote
- How much cover you need Cover levels of £1m, £5m or £10m are readily available from most insurance companies. The level you need will depend on the size of your business, the risks associated with your profession and where the business is based. Local authorities may require businesses they are working with to have at least £5m of cover. Check with potential insurers to work out your needs.
- How long you need the cover for Most policies from big insurers will cover you for a year. You may be able to find temporary or short-term cover for a one-off event but be sure to shop around, you might find an annual policy is better value. If you’re getting married your wedding insurance should have an option to include public liability if it doesn’t come as standard.
- No claims bonus If you’re shopping around for a new provider don’t forget to let them know how many years you have had cover without making a claim. Like car insurance, you can keep premiums down if you have a no claims bonus.
- Is professional indemnity right for your work? If you’re a self-employed IT contractor, consultant or web designer you may need professional indemnity cover as well as or instead of public liability. Indemnity insurance covers you if there are claims because of mistakes or poor quality work provided by a specialist. We’ve teamed up with PolicyBee, which also offers public liability, to offer a 10% discount to Bought By Many members, find out more here.
As mentioned earlier, you may also need employers’ liability to cover any staff.
This article was independently written by Bought By Many. We were not paid to write it, but we may receive commission for sales that result from you clicking on a link to one of our partners.