Public liability insurance protects self-employed workers from the cost of injury or property-damage claims, shielding your business and personal finances if anything goes wrong.
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Public liability insurance for self-employed workers covers the cost of claims made by clients or the public for injury or property damage caused by your work. It’s important because, when you're self-employed, you’re on the hook if anything goes awry.
Without this cover, a single serious claim could wipe out your savings, damage your reputation, and potentially force you to cease trading. And as a sole trader, your personal assets aren’t shielded either.
This guide explains everything you need to know about self-employed public liability insurance, from understanding what it covers to choosing the right policy for your needs.
Public liability insurance protects you if someone is injured or their property is damaged as a result of your business activities. The policy covers compensation payments, legal fees, and any associated costs if a client or member of the public makes a complaint against you.
This protection is important for all businesses. But it’s especially vital for self-employed workers, since you're personally liable for any claims. And even claims that turn out to be unfounded can be expensive. Legal costs alone can run into thousands of pounds, and you'll need to pay these upfront before any judgment is made in your favour.
Common examples of claims include accidentally damaging a client's property while working on their premises (like knocking over an expensive vase or scratching wooden floors), a client or visitor tripping over your equipment at a job site, injuries caused by tools or materials you're using, or someone being hurt by work you've recently completed.
These accidents can happen regardless of how careful you are, which is why insurance provides crucial peace of mind.
Public liability insurance policies cover physical injury or property damage – the kind of accidents that happen in the real world. Professional indemnity insurance, on the other hand, covers claims arising from professional advice, errors, or negligence in the services you provide.
For example, if you're a builder and accidentally break a client's window, that's covered by public liability. If you're an accountant and give incorrect tax advice that costs a client money, that's covered by professional indemnity.
If your work involves visiting client premises, working in public spaces, or having clients visit your location, you should seriously consider getting public liability cover.
Examples of workers who commonly need self-employed public liability insurance include:
Accidents can happen anywhere you work, and clients or their property may be at risk even when you're working from home. If you run fitness classes from your garage or see hairdressing clients in your home salon, you're still exposed to liability risks.
In most cases, public liability insurance for self-employed workers isn't legally required in the UK. However, there are important considerations that often make it essential in practice.
Many clients, particularly larger companies and public sector organisations, require contractors to have public liability insurance before they'll work with you. They'll typically ask for proof of cover with minimum limits. Without it, you simply won't get the work.
The only exception is employers' liability insurance, which becomes legally required if you employ anyone, even part-time or temporarily.
Construction and building trades face higher premiums due to heavy machinery, structural work, and on-site hazards. Builders public liability insurance for self-employed workers typically costs more than cover for office-based freelancers. Trades working with electrical systems, gas, or other utilities also face elevated risk, as do businesses working with children or vulnerable adults.
Standard self-employed public liability insurance policies cover third-party injury or property damage that occurs as a result of your business activities. This means if someone who isn't your employee gets hurt or their belongings are damaged, you're covered.
The cover includes:
Legal fee cover is often the most valuable part of the policy, as they're covered even if the claim against you is ultimately unsuccessful.
Most policies also cover damage caused by employees if you hire help, subcontractors working on your behalf, or defective materials you've used in your work. This means you're protected even if you weren't directly responsible, but the incident occurred as part of your business operations.
Many insurers offer optional add-ons to enhance your cover. Tool insurance protects your equipment against theft or damage, which is particularly valuable for tradespeople with expensive tools.
Product liability cover protects you if something you've sold causes injury or damage after the sale. You can often bundle professional indemnity with your public liability policy for comprehensive protection and potential cost savings.
How much a self-employed public liability insurance policy is depends on your specific circumstances. That said, basic cover routinely costs between £50 and £200 annually.
Low-risk businesses like home-based consultants or administrative freelancers might pay towards the lower end of this range. Higher-risk trades can expect to pay £200 to £500 or more per year (with some specialist or particularly high-risk occupations paying even more).
Several factors affect the price of your policy. Industry risk is the primary consideration, with construction and trades facing higher premiums than office-based work. Coverage limits matter too: Policies typically offer £1 million, £2 million, £5 million, or £10 million in cover, with higher limits costing more.
As with all insurance, your claims history impacts costs as well. If you've made claims in the past, insurers will typically charge higher premiums as they see you as a greater risk. Business size also matters, including your annual turnover and whether you employ anyone or use subcontractors. Location can affect premiums, too.
The goal is to find the right balance of coverage, cost, and service. Don't just go for the cheapest option and ensure you understand what you're getting.
Start by comparing policies based on coverage limits, excess amounts (i.e. what you'll pay towards any claim), and exclusions (i.e. what's not covered). Read the policy wording carefully to understand exactly what protection you're getting. Some policies have significant exclusions that might affect you, particularly around specific activities or types of work.
You can buy insurance directly from insurers or through brokers. Direct insurers often offer competitive prices and quick online quotes, making them convenient for straightforward cover. Brokers can be valuable if you have complex needs, operate in a niche industry, or want expert guidance on getting the right level of cover. They can also help if you've been refused cover elsewhere or have a history of claims.
Check the insurer's customer support and claims handling reputation before committing (services like Trustpilot are good for this). Look for reviews from other self-employed workers in your industry, and check how quickly they process claims and whether they have UK-based support teams. The cheapest policy isn't much use if the insurer makes claiming difficult or slow.
Finally, consider bundling your cover with other insurance types for potential savings. Many insurers offer discounts if you take out public liability alongside professional indemnity or tool insurance. This can save you money while ensuring you have comprehensive protection across different risk areas.
Insurance protects you from liability claims, but managing your day-to-day cash flow is equally important for long-term success. Unexpected expenses – whether insurance premiums, equipment repairs, or covering costs while waiting for client payments – can strain your day-to-day finances.
Our small business loans are designed specifically for those who need flexible funding. You can borrow between £1,000 and £1,000,000 (and you only pay interest on what you use). Unlike traditional loans, you can draw down funds as needed and repay early without penalties.
Whether you need to pay your insurance premium upfront, invest in new equipment, or smooth out cash flow gaps between projects, an iwoca loan helps you stay on top of your business finances without the stress of rigid repayment terms.
Want to see if you qualify? Check your eligibility for an iwoca business loan in minutes.
