Question 1

What is public liability insurance and who needs it?

Accepted Answer

**Public liability insurance** covers your legal liability if your business activities cause **injury to a member of the public or damage to their property**, including the legal costs of defending a claim.

**What it typically covers:** a customer slipping on a wet floor in your premises; a contractor damaging a client's property; a falling sign injuring a passer-by; and the legal defence costs, which can exceed the compensation itself.

**What it does not cover:** injury to your own employees (that is **employers' liability**); faults in professional advice or services (that is **professional indemnity**); damage to your own property or stock; and deliberate acts.

**Who needs it.** It is **not legally required** in the UK — but it is frequently required in practice:

**Contractually.** Most commercial clients, local authorities and larger organisations will not engage a contractor or supplier without evidence of it, usually specifying a minimum limit — £1m, £2m, £5m or £10m are common.

**By landlords**, as a condition of a commercial lease.

**By venues and event organisers**, and by many trade bodies and licensing regimes.

**Practically**, by anyone whose work brings them into contact with the public or onto others' property — trades, mobile hairdressers, therapists, market traders, tutors visiting homes, event stallholders. A single serious injury claim can end a small business.

**The one that genuinely is compulsory** is **employers' liability insurance**, required by law in Great Britain for almost any business with employees, with a minimum of £5m cover and substantial daily fines for non-compliance. The definition of employee is broad and can include some casual and temporary workers.

**Points to check:** the limit of indemnity, whether cover is **claims occurring** or **claims made**, territorial limits if you work abroad, and whether subcontractors are covered or need their own.

**Personal liability** is usually included within home insurance for non-business activities.

Question 2

What is professional indemnity insurance and who needs it?

Accepted Answer

Professional indemnity (PI) insurance covers claims arising from the advice or services you provide — errors, omissions, negligence, or work that fails to meet the expected standard. It also covers

Question 3

What type of business insurance do freelancers need?

Accepted Answer

Freelancers need various types of business insurance, including general liability, professional liability, and property insurance, to protect against risks and ensure financial stability.

Question 4

Why doesn't home insurance cover letting a property?

Accepted Answer

Because the risk profile changes fundamentally when someone other than the owner occupies a property, and standard home insurance is priced and written for owner-occupation. Why insurers treat it

Question 5

What is employers' liability insurance, and is it compulsory?

Accepted Answer

Employers' liability (EL) insurance covers an employer's legal liability for injury or illness suffered by employees arising out of their work — and in the UK it is compulsory by law for almost every

Question 6

What happens if my insurance company goes bust?

Accepted Answer

In the UK, the Financial Services Compensation Scheme (FSCS) exists for exactly this, and insurance is among the better-protected products — but the level of protection depends on the type of cover.

Question 7

Is legal expenses cover on my insurance worth having?

Accepted Answer

Legal expenses insurance (LEI), usually sold as a modest add-on to motor or home policies, funds legal costs for pursuing or defending certain disputes. Whether it is worth the money depends on what

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