Key points
Public Liability Insurance covers compensation and legal costs if your work accidentally injures a third-party or damages a customer's property.
Without it, you'd be paying repair costs, legal fees and compensation out of your own pocket, on top of the reputational damage if a customer is left out of pocket.
Public Liability Insurance doesn't cover everything. If a claim comes from negligent advice or a design error rather than physical damage, that's a job for Professional Indemnity Insurance instead.
If you're self-employed in the trades, you'll likely have heard of Public Liability Insurance, but seeing how it actually plays out in the real world with a real claim might make it click a little faster than reading lengthy policy documents. Below, we've put together two examples of something going wrong on the job. One where an active Public Liability Insurance policy helps get your business out of tricky spot, and another where it wouldn't, because the claim falls under a different type of cover entirely.
The following is a genuine claim from a Rhino customer.
A plumber fitted a new dishwasher in a customer's kitchen and, before leaving, checked the connections for leaks. Everything looked dry and secure and, to the plumber's mind, the job was done, and he headed off to the next job.
Later that evening, the customer called. Water had made its way down into the flat below, and what looked like a clean installation a few hours earlier had turned into a leak affecting a third-party's home.
Because the plumber had Public Liability Insurance in place, they were able to make a claim on their insurance rather than paying out of their own pocket. The insurer covered the cost of putting things right for the damage caused, with a total payout of over £3,400. Without that cover, the bill would have landed on the business directly, on top of an understandably unhappy customer and neighbour to manage.
Cases like the above happen more often than you’d imagine, and it’s useful to look at because nothing about the original job looked careless. The connections were checked and seemed secure, yet a leak still developed once the plumber had left. That's exactly the kind of scenario that Public Liability Insurance is there for.
On top of the cost of damage, there's also the relationship to think about. A neighbour and a customer left chasing repairs themselves can sour a job that was otherwise done well, and word travels fast in the trades. With Public Liability Insurance in place, the claim was resolved and the flat below got put right, meaning the plumber's relationship with the customer didn't have to suffer.
To read more about Public Liability Insurance, head over to our guide.
Here's where things get a bit less obvious. Say an electrician carries out an Electrical Installation Condition Report (EICR) on a rental property and signs it off as satisfactory. Eighteen months later, the landlord is selling the property, and the buyer's own survey turns up a fault that should have been picked up at the time of the original inspection. The landlord ends up paying for remedial electrical work and negotiating a price reduction with the buyer to keep the sale on track.
The landlord, understandably, comes back to the electrician to recover those costs. But this isn't a case of the electrician's work directly causing physical damage on the day, like a wire left loose that started a fire. It's a claim about the quality of professional advice and judgement: the certificate said the installation was safe, and that opinion turned out to be wrong. That distinction matters, because it's the difference between a Public Liability claim and a Professional Indemnity one.
Public Liability Insurance is built to respond to accidental injury or property damage caused by your work. A negligent certification, design error or piece of bad advice that leads to someone else's financial loss, without any physical damage to trigger the claim, sits outside what Public Liability Insurance is there for. This is exactly the gap that Professional Indemnity Insurance is designed to fill, covering legal liability for negligent acts, errors or omissions in the professional services you provide. Any trade that signs off certificates, specifies designs or gives advice a customer relies on, not just labour, may want to think about whether their cover reflects that side of the work too. For more on how this type of cover works, see The Ultimate Guide to Professional Indemnity Insurance.
Public Liability Insurance is there for the moments when your work physically damages something or hurts someone, like a fitting that fails and floods two rooms. It's not designed to cover negligent advice, design work or certification that leads to a financial loss further down the line, nor will it protect you if an employee makes a claim against your business – you’ll need Employers Liability Insurance for that. Knowing what cover is right for you can be tricky to understand. Fortunately, our team is around throughout the working week to help. Give us a call on 0116 243 7904 or drop us a message on chat and we’ll be happy to help.
Have you ever walked away from site absolutely sure in your mind that everything was secure and good to go? That's how one of our customers left site as well until later that evening he got a call from a customer telling him otherwise...
Employers' Liability Insurance is a legal requirement for the majority of businesses with staff, however there is an exception.
Self-employed in the trades? This guide breaks down the key insurance covers sole traders need — from Public Liability to Tools Cover and Income Protection — in plain English. Find out what matters, what's legally required, and where to start.
Tell us your trade and get a tailored insurance quote for your business in seconds
Our team of experts are available to talk to Mon-Fri 08.30-17.30 and Sat 10.00-14.00
