Public Liability vs Professional Indemnity: Which Do You Need?

‍‌​​​​​​​‌‌‌​‌​‌‌​‌‌​‌​‌​‌‌‌​​‌‌‌‍SiteKiln gives you plain-English information, not personal insurance, financial or legal advice. If you need advice specific to your situation, talk to a qualified insurance broker or solicitor.

6.1.1 The short version

Public liability insurance (PL) is the cover that pays out if your work injures a member of the public or damages their property and they make a claim against you. It pays for solicitors, court costs and any compensation you are legally liable to pay, up to the limit on the policy.

The law does not force you to buy PL, but most decent clients and main contractors do. You will often be refused site access or final payment if you cannot show a current PL certificate with the right limit.

Get PL in place as standard, set a sensible limit that matches the size of jobs you actually do, and ignore anyone trying to sell you more cover "just in case" without explaining why. Always check your insurer or broker is authorised on the FCA Financial Services Register before you hand over money.

6.1.2 Why it matters

One solid public liability policy can turn a nightmare claim into an insurance problem instead of a "lose your house" problem. One serious claim without PL can wipe out years of profit, your savings and, if you are a sole trader, potentially force you into bankruptcy.

Most claims are not about freak accidents; they are about normal jobs where something goes wrong -- water escape, falls, property damage or someone tripping over your kit. A cheap policy with the wrong exclusions or a fake certificate is just as bad as having no cover when the letter before action lands.

PL also matters commercially. If you want to work for councils, housing associations, schools, big developers or Tier 1 contractors, a minimum PL limit is normally a non-negotiable gate to get through.

6.1.3 What public liability actually covers

Most construction PL policies cover:

• Injury to third parties (clients, visitors, members of the public) caused by your business activities.
• Damage to third party property -- for example a burst pipe flooding a finished kitchen, or a scaffold collapse damaging cars.
• Legal defence costs and any compensation you are legally liable to pay, up to the policy limit.

PL normally does not cover:

• Your own injuries (you need personal accident or similar).
• Injuries to your employees (that is employers' liability, which is separate and a legal requirement if you have staff).
• The cost of re-doing bad workmanship -- insurers may cover the damage it causes, but not the labour and materials to put your work right.

6.1.4 Typical limits in construction

In domestic and light commercial work, common PL limits are:

• £1 million -- often the minimum starter level for sole traders and very small firms.
• £2 million -- common for trades packages and many small building firms.
• £5 million -- frequently required for local authority, school or NHS work, some housing associations and busier commercial sites.
• £10 million+ -- sometimes specified on high-risk, high-value or city-centre projects.

Rule of thumb:

• If you mainly do domestic work, £1-2 million is usually enough unless a client contract says otherwise.
• If you work for public bodies, large contractors or in crowded public spaces, expect to be asked for £5 million or more.

6.1.5 When contracts make it mandatory

PL is not automatically required by law in the way employers' liability is, but contracts often make it compulsory. You will see PL requirements in:

• Main contractor subcontract orders and frameworks.
• JCT and NEC contracts, usually in the insurance schedule.
• Local authority, NHS and school terms for works on their premises.

Typical wording:

• "The Contractor shall maintain public liability insurance with a limit of indemnity not less than £5,000,000 any one occurrence."
• "Evidence of public liability insurance must be provided prior to site access."

If you sign up to a £5 million PL requirement but only hold £1 million, you are in breach of contract from day one. The calm way to handle this is:

• Read the insurance section before you agree a price.
• If the limit is higher than you hold, get a quote to increase it and allow for the cost in your rate.

6.1.6 What's industry standard, what's over-sell

For most small construction businesses, a sensible baseline looks like:

• PL in place at all times you are trading, with at least £1 million cover, and preferably £2 million if you touch commercial or council work.
• Higher limits only where a specific client, main contractor or site actually requires it, or where the risk genuinely justifies it (city-centre scaffolds, cranes, large public footfall).

Common over-sell tactics:

"You must have £10 million cover as standard."

• Reality: most small trades do not need £10 million unless contracts demand it; it just inflates your premium.

"You need PL, employers' liability and professional indemnity all bundled, even if you have no staff and give no design advice."

• Reality: employers' liability is only compulsory if you employ people, and professional indemnity is mainly for design/specification advice.

"We've added all these extras for your protection" without making it clear they are optional (for example, legal expenses, gadgets, breakdown).

To sanity-check a quote:

• Ask for a clear list of each cover, each limit and each cost line.
• Strip out add-ons you clearly do not need (for example, stock cover if you hold no stock, office cover if you do not have an office).
• Check the PL limit against the biggest contract you realistically plan to take on in the next year.

6.1.7 Signs something may be a scam

Genuine PL insurance in the UK will always:

• Be issued by an authorised insurer or broker, with a policy number and renewal date, and show your legal or trading name correctly.
• Provide a schedule that states the PL limit "any one occurrence/claim" and the property damage excess.

Red flags:

• "Certificates" that are clearly just edited PDFs with no insurer name, address or FCA details.
• Policies sold only via social media or messaging apps, where you never see full terms and conditions.
• Prices that are far below every other quote for supposedly the same cover.

To protect yourself:

• Use the FCA Financial Services Register or Firm Checker to confirm the insurer or broker is authorised before you pay.
• Call the insurer using contact details from the insurer's own website (not the seller's) and confirm the policy number and limit.

6.1.8 How to buy PL sensibly

You stay in charge if you:

• Decide your required limit first (based on who you work for and your biggest likely job), then go to the market.
• Get at least two quotes -- one through a construction-savvy broker, one direct from an insurer or trade scheme.
• Check for common construction exclusions such as height limits, depth limits for groundworks, hot-works conditions and use-of-heat exclusions.

On day one of a new policy:

• Save the schedule and certificate where you can find them quickly on your phone and laptop.
• Send the certificate to any main contractors or clients who ask for it.
• Put the renewal date in your calendar at least 4 weeks before expiry so you do not end up with a gap in cover.

6.1.9 Quick PL health check

You are in decent shape on PL if you can answer "yes" to most of these:

Is your public liability policy in force today, with no gaps in the last 12 months?

Does your PL limit at least match the biggest contract or site requirement you expect to have this year?

Can you find your PL schedule and certificate on your phone within 60 seconds?

Have you checked your insurer or broker on the FCA Register in the last 2 years?

Have you read the key exclusions (height, depth, hot works, high-risk trades) and checked they match the work you actually do?

If you hit a "no", that is your action list for this week, not "when things go quiet".

6.1.10 What to do next

• Check your PL policy is in force today and the limit matches your biggest current or expected contract requirement.
• Save your PL certificate somewhere you can find it on your phone within 60 seconds.
• Read the key exclusions (height, depth, hot works, high-risk trades) and check they match the work you actually do.
• Use the FCA Financial Services Register to confirm your insurer or broker is authorised.
• Put the renewal date in your calendar at least 4 weeks before expiry so you never have a gap.

6.1.11 Who to contact

• Your insurance broker -- to review limits, exclusions and renewals (paid)
• FCA Financial Services Register -- fca.org.uk/firms/financial-services-register -- to check your insurer or broker is authorised (free)
• Financial Ombudsman Service -- 0800 023 4567, financial-ombudsman.org.uk -- if you have a complaint about your insurer (free)
• ABI (Association of British Insurers) -- abi.org.uk -- general insurance guidance (free)
• Citizens Advice -- citizensadvice.org.uk -- if you need help understanding your rights (free)

6.1.12 Sources and legislation

• Employers' Liability (Compulsory Insurance) Act 1969 -- EL requirements that sit alongside PL in construction. legislation.gov.uk/ukpga/1969/57
• Consumer Insurance (Disclosure and Representations) Act 2012 -- your duties when taking out or renewing insurance. legislation.gov.uk/ukpga/2012/6
• Third Parties (Rights against Insurers) Act 2010 -- rights of third parties to claim directly against your insurer in certain situations. legislation.gov.uk/ukpga/2010/10
• Road Traffic Act 1988 -- van and vehicle insurance requirements relevant to trades. legislation.gov.uk/ukpga/1988/52

6.1.13 Related guides on this site

• 6.2 Employers' liability insurance
• 6.3 Professional indemnity insurance
• 6.10 Insurance for subcontractors
• 6.9 Making an insurance claim
• 6.5 Contract works / all risks insurance
• 15.3 Getting your insurance sorted

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