Understanding Public Liability Insurance

Posted on: 27 February 2020

Whether you own a business or company, public liability insurance is crucial to consider. Why?

Public liability insurance covers you or your business against negative circumstances that may arise as a result of your business activities (if your business activities cause harm to third parties or damage to third party property).


When you get public liability insurance, this is what you are covering yourself from:

Physical Loss or Damage to Third Party Property If you own an electronic repair shop and lose a customer's electrical device (for example, a mobile phone) or cause more damage to it, public liability insurance helps cover the loss or damage. Another example could be if you own a construction company and one of your trucks damages a neighbour's property or your construction processes cause pollution or health concerns to people living near the construction site. Public liability insurance helps cover the damage caused.

Legal Problems If someone sues your company and they have a valid reason to do so, you want to be covered so that your business does not become bankrupt.

Harm Caused by Your Workers If your workers cause harm to people or damage to property while carrying out your company's services, public liability insurance can help you cater to the damage.

Third-Party Harm While On Your Company Premises If a customer or client visits your company and gets injured, public liability insurance helps cover medical and treatment costs. Do not mistake this for worker's compensation insurance, which covers any harm that might occur to your employees.

Is Public Liability Insurance Compulsory?

No — If your company is less likely to cause any harm to people or damage other people's property, it is not a must for you to get public liability insurance. However, for your sake, if you think that there is a particular instance that could result in your business facing a liability issue, you are safer buying the insurance.

Yes — Some companies handle services or products that can cause damage and harm to communities around it. The local authority usually makes it a must for the company to buy public liability insurance as well as the company to put up measures to avoid harm or damage. In this case, buying public liability insurance is compulsory.


If you are buying public liability insurance, ensure to ask for the specifics it covers. These specifics should cover what your business might encounter; nothing more or less, because they determine how much you may be expected to pay for the cover. Of course, a smaller business with fewer risks pays less for public liability insurance when compared to a larger company.