What is public liability insurance?
Public liability insurance is a type of business insurance that could help cover claims if a member of the public is injured or their property is damaged because of your business operations. US insurance companies don’t typically offer this as a standalone policy. Instead, this coverage is often included as a part of a general liability insurance policy.
The benefit to the policyholder is that they get all the protection of this type of insurance as well as other broader business insurance coverage.
In the United States, general liability insurance is the industry standard and typically one of the first types of business liability coverage they buy.
Outside the US, especially in the UK and Australia, public liability insurance is the more common term used for this type of coverage. While it’s similar to US general liability insurance, policy details vary by country and provider.
What could public liability insurance cover?
Public liability insurance typically refers to third-party bodily injury (meaning injuries to non-employees) and damage claims to other people’s property involving your business and the public. For example:
- If a customer suffers a slip-and-fall injury at your store, public liability insurance could help cover their medical expenses.**
- If one of your employees accidentally breaks a piece of furniture while doing business in a client’s home, a public liability policy could help cover the damages.
Public liability insurance may help cover:
A public liability policy doesn’t usually cover employee injuries. These would usually be protected by workers’ compensation insurance. Public liability insurance also typically excludes your professional mistakes that cause a client financial harm. For this type of protection, professional liability insurance (also called errors and omissions insurance, or E&O, may be right for your business.
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Public Liability Insurance
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General Liability Insurance
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Coverage usually includes:
- Medical bills for non-employees
- Damage your business causes to other people’s property
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Coverage usually includes:
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Standard term internationally, especially the UK and Australia
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Standard term in the US
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Is public liability insurance the same as General Liability insurance?
These two business insurance terms sound similar — and in many cases, they overlap. Compare them side by side and you’ll see that:
- Public liability insurance usually can help protect your business from the costs of injuries to the public and property damage involving your business and the public.
- General liability insurance often covers all of the above, as well as claims of advertising harm, libel and slander.
If your business is sued for improper image use in an ad, public liability probably won’t help, but a general liability policy could provide coverage.
How much does public liability insurance cost?
Public liability insurance is typically included in general liability insurance. Several factors can influence the price (called the premium) of the cost of general liability insurance, including:
- Your industry
- Your business operations
- The size of your business
- Where you do business
- Your business needs and how much coverage you choose
- Policy limits
For example, a self-employed consultant working from home may pay less than a contractor who works onsite at customer locations. Higher coverage limits and increased risk exposure can increase your premium.
Get a basic estimate of how much general liability will cost your business with the general liability calculator. Or you can get a free, no-obligation insurance quote in about 10 minutes to see the exact price you’ll pay for your business.
Who could benefit from public liability insurance?
If your business interacts with customers, clients, vendors or the general public, liability coverage may help protect you from unexpected claims.
You may need public liability protections if you:
- Own a retail store or office
- Work at client locations
- Host events
- Sign contracts requiring liability insurance
You can get this type of coverage through general liability insurance.
Is public liability insurance required by law?
Public liability insurance (or, more accurately, general liability insurance) may be required by:
- Landlords renting you a commercial property for your business
- Client contracts
- Event venues
- State licensing boards to practice your profession
Requirements vary by state and industry, so it’s important to review local regulations or contract terms carefully.
Even when it’s not required by law, many small business owners choose to carry a general liability insurance policy to help protect their business.
What’s usually excluded from public liability insurance/General Liability?
While general liability insurance covers a lot, it doesn’t protect your business from every business risk. Many small business owners add more insurance policies to help protect them from more risk. These could include:
- Workers’ compensation insurance to help cover medical expenses and lost wages if an employee is injured while working. Most states require this type of business insurance if you hire employees.
- A Business Owner’s Policy, also called BOP insurance, combines general liability with commercial property insurance to help protect both your own business property, such as your workspace, laptops, business furniture and fixtures, and non-employee liability risks.
- Professional liability insurance, which may help if a client takes action against you claiming that your professional errors, omissions or negligence caused them to lose money.
Each type of coverage addresses a different risk, which is why many small businesses build layered protection over time.
