Public Liability Cover for Sole Traders
Public liability insurance covers claims from third parties for injury or property damage arising from your business activities. For anyone who visits client premises, works in people's homes, or has customers visit them, it is the foundational cover.
What it covers
Bodily injury to a member of the public caused by your work or your presence.
Damage to third-party property — a client's floor, a neighbouring building, equipment on a site.
Legal defence costs, which are frequently the larger part of a claim and are incurred even when the allegation ultimately fails.
What it does not cover
Your own property, tools or vehicles. Those need separate cover.
Injury to your own employees, which requires employers' liability and is a legal requirement in many jurisdictions from the first employee, including part-time and casual staff.
Faulty professional advice or design, which requires professional indemnity. A consultant whose recommendation costs a client money has a professional indemnity claim, not a public liability one, and the distinction catches people out.
Defective products, which may need product liability, often bundled with public liability.
Choosing a limit
Common limits run from one to ten million. The right figure depends on your work rather than your size.
Many clients specify a minimum in their contracts, and public sector and large corporate clients frequently require higher limits than small businesses expect.
Work involving heights, heat, water, or occupied premises carries greater potential for serious damage, and the limit should reflect the worst plausible outcome rather than the typical job.
Increasing the limit is usually inexpensive relative to the additional protection.
Claims made versus occurrence
Public liability is typically written on an occurrence basis, covering incidents that happen during the policy period regardless of when the claim is made. This matters because it means cover persists for past work after the policy ends.
Professional indemnity is usually claims made, covering only claims notified during the policy period. That difference means professional indemnity needs to be maintained after you stop trading — run-off cover — which sole traders frequently overlook when winding down.
Practical points
Describe your activities accurately when applying. Cover responds to the business described, and undertaking work outside that description can leave you uninsured.
Keep the certificate accessible, since clients ask for it and some sites will not admit you without it.
Notify the insurer of any incident promptly, even if no claim has been made. Late notification is a common reason for disputes, and policies generally require prompt notice of circumstances that might give rise to a claim.
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