How much public liability insurance do I need?

Start with your contracts, not a comparison site default

The single most common reason businesses hold the wrong limit is that they picked the cheapest option at quote time. Instead, read the insurance clause of every contract you sign. Councils, main contractors and commercial clients routinely require £5 million — sometimes £10 million — and you can't start work without proof. Your required limit is the highest figure any client demands, not the lowest premium you can find.

Then think about your realistic worst case

Ask what the most expensive plausible accident looks like in your trade. A decorator spilling paint on a carpet and a plumber flooding a block of flats both have public liability claims — but one is measured in hundreds and the other in hundreds of thousands. Work at height, heat tools, work near the public or on high-value property all push your worst case, and your limit, upward.

Remember the limit covers compensation plus legal costs and the claimant's costs. Serious injury claims — a passer-by hurt by falling materials, for example — can exceed £1 million on their own once lifetime care and lost earnings are counted.

The cost of stepping up is smaller than you think

Liability limits aren't priced linearly. Insurers know most claims are small, so doubling your limit from £1m to £2m, or stepping to £5m, usually adds a modest percentage to the premium. Buying the wrong limit to save £40 a year is one of the falsest economies in small business insurance — ask your broker to quote two or three limits side by side and compare properly.

Why a specialist public liability insurance broker helps here

Sizing a limit means reading your contracts, understanding your trade's real exposure and knowing how different insurers price each tier. A specialist broker does this daily: they'll tell you when £1m is genuinely fine, when a contract quietly demands £5m, and which underwriters price your trade fairly at higher limits — including specialist liability markets that never appear on comparison sites.

Common questions

Is £1 million public liability insurance enough?

For low-risk work it can be, but many commercial clients, councils and main contractors require £5 million as a condition of the contract. The right answer comes from your contracts first, then the realistic worst-case damage your work could cause — not from the cheapest default limit.

What limit do councils and commercial clients usually require?

Local authority tenders and most commercial contracts typically require £5 million, and some require £10 million — particularly for work on their premises or infrastructure. Check every contract before you buy; the requirement is usually buried in the insurance clause.

Does a higher limit cost much more?

Usually less than you'd expect. Liability pricing isn't linear — moving from £1m to £2m or £5m often adds a modest percentage to the premium rather than doubling it. A broker can price several limits at once so you can see the real cost of each step up.

What happens if a claim exceeds my limit?

You pay the difference personally or from your business. If a £2m claim lands on a £1m policy, the insurer pays £1m and the rest is yours — which is exactly how small businesses get wiped out by a single accident. Sizing the limit correctly is the entire point of the cover.

How CoverBroker fits in

CoverBroker is not an insurance broker and doesn't arrange cover. Upload your current public liability schedule or statement of fact and we'll introduce you to a specialist broker matched to your trade — with an optional free AI review of your existing policy first, so you can see whether your current limit still fits your contracts. Free, no obligation.