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Do I need Public Liability Insurance if I’m Self-Employed?


Public liability insurance covers you if someone makes a compensation claim against you.

It isn’t a legal requirement. However, it’s unwise to operate without it for two reasons:

  • Compensation claims can be difficult to handle
  • Compensation claims can be expensive to settle

It may also be a condition of your membership of a professional organisation to have this type of insurance.

Why are compensation claims difficult to handle?

You only have to pay compensation claims if you’re legally liable. There are a few things that determine whether you’re legally liable.

First, you must have owed a duty of care to the person who is claiming compensation from you. Second, you must have breached that duty of care by doing something or failing to do something. Third, injury or damage must have resulted from that breach. And fourth, it must have been reasonably foreseeable that the injury or damage could have occurred.

There are all sorts of legal precedents that deal with what’s meant in terms of who you owe a duty of care and what constitutes a breach of that duty. As such, compensation claims can sometimes involve complex legal arguments.

Thankfully, your public liability insurer will help because they’ll have a legally trained team that specialises in dealing with these types of claim.

How much do compensation claims cost?

A minor compensation claim can often be settled for a few hundred pounds. However, by the time the legal fees and other associated costs and expenses have been added in the eventual settlement amount can end up being a four-figure sum.

More serious injuries such as a broken bone can result in a five-figure settlement. This is particularly the case where the claimant has had to take time off work as a result of their injury as you could be liable for their lost earnings.

It is not uncommon to see six-figure settlements where a serious injury such as a spinal injury. With this type of claim, you might also need to pay for anything the claimant needs to deal with their ongoing situation, such as adaptations to their home to address their new requirements due to their disability, or a different car if they can no longer drive their existing car.

Membership of professional organisations

Although you aren’t legally required to have public liability insurance, some professional organisations insist that their members have it. In addition, some local authorities will insist that you have public liability insurance before they will allow you to trade.


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