What is general liability insurance?
General liability insurance protects businesses against claims for third-party injury, property damage, and legal costs arising from their everyday operations.
It’s a core form of commercial cover—especially important for businesses that interact with customers, suppliers, or the public.
Although the term “general liability insurance” is more common in the US, it’s often used interchangeably in the UK when referring to what’s technically called public liability insurance. In practice, it means protection if your business accidentally causes harm to someone else—or their property—and they take legal action.
This could be a customer tripping over a misplaced cable, a contractor damaging a client’s flooring, or a member of the public being injured by falling signage. The policy steps in to cover legal defence, court costs, and compensation payouts, helping your business avoid crippling expenses.
General liability insurance is often the first policy small business owners consider. It’s not just for manual trades or retail. If there’s any chance your work could affect a third party in a physical space, this type of cover becomes a smart, often essential, safeguard.
How does general liability insurance work?
General liability insurance works by covering your legal defence costs, compensation payouts, and related expenses if your business accidentally injures someone or damages their property.
You pay a premium, and in return, your insurer steps in when a covered incident triggers a claim.
The policy doesn’t just pay compensation—it also provides the legal muscle to deal with solicitors, court proceedings, and negotiations. Whether the claim is valid or not, the insurer will usually assign legal experts to represent your business, investigate the event, and handle the resolution process. That’s a major reason businesses take out cover: not just for the payout, but for the protection behind it.
Say a client trips over a tool at your site and breaks their wrist. Or a decorator accidentally damages flooring in a client’s home. If that person claims for medical bills or repairs, your general liability policy would kick in. The insurer pays compensation (up to the cover limit), handles legal negotiations, and protects your business from reputational or financial collapse.
Policies usually come with a cover limit (e.g. £1M, £2M, £5M) and optional extensions—like product liability or temporary employee cover—depending on how your business operates.
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Get QuotesIs general liability insurance the same in the UK and US?
Not exactly—’general liability insurance’ is a US term, while in the UK, the equivalent is typically known as ‘public liability insurance’.
Although the coverage types are broadly similar, the terminology and legal frameworks differ.
In the US, general liability insurance is a core business policy that often includes elements such as bodily injury, property damage, medical payments, and even limited advertising injury. In the UK, these protections are generally split into more specific policies—primarily public liability insurance, with separate cover for professional indemnity, employers’ liability, or product liability, depending on the risk.
So while a UK business owner might not see “general liability” listed when browsing insurers, they’re likely buying the same essential protection under a different name.
For example, if a US-based guide tells you to “get general liability cover” before starting a contract, the UK equivalent will almost always be public liability insurance—sometimes bundled with other cover types, depending on your business profile.
What does general liability insurance cover?
General liability insurance covers claims made against your business for third-party injury, property damage, and legal expenses—arising from your day-to-day operations.
If your business accidentally causes harm, this policy is designed to protect you.
Typical cover includes:
- Bodily injury to third parties (e.g. a customer trips in your shop and breaks their wrist)
- Property damage (e.g. a contractor cracks a client’s kitchen worktop while installing fittings)
- Legal defence and court costs (even if the claim is groundless)
Many policies also include cover for:
- Damage caused by tools or equipment while on a job
- Accidents at third-party premises (like when you’re delivering, setting up, or visiting a site)
- Product-related harm (if you provide or install physical goods)
It’s important to note that general liability insurance doesn’t usually cover things like poor workmanship, professional mistakes, or employee injury. That’s where other policies—like professional indemnity or employers’ liability—come into play.
If your work involves people, property, or public spaces, general liability insurance acts as your legal and financial buffer when accidents happen.
Who needs general liability insurance?
Any business that interacts with clients, customers, suppliers, or the public should strongly consider general liability insurance.
It doesn’t matter whether you’re a sole trader, freelancer, or operate a limited company—if your work creates a risk to third parties, you’re exposed.
This includes trades such as builders, decorators, and electricians, where physical work is performed on-site. But it also extends to mobile professionals like beauticians, dog groomers, and photographers who visit client homes—or invite clients into theirs.
Even office-based businesses can benefit. If you host meetings with clients or suppliers, deliver products, or attend exhibitions and networking events, there’s potential for accidental damage or injury. Some venues, councils, and private clients will insist on proof of cover before contracts are awarded or bookings confirmed.
If you’re not sure, ask yourself one thing: Does my work ever bring me into contact with people or property I don’t employ or own? If so, general liability cover may not be legally required—but it’s professionally expected and financially protective.
How much general liability insurance do I need?
Most UK businesses choose between £1 million and £10 million in general liability cover, depending on their trade, risk exposure, and contract requirements.
The right level for you depends more on who you work with—and where—than on your business size.
Low-risk service providers (like home-based consultants or personal trainers) often opt for £1–2 million in cover. This is generally sufficient for one-to-one work where physical risk is limited. For tradespeople working in client homes or public-facing settings, £2–5 million is more common—especially if you subcontract or operate in busy environments.
Businesses bidding for public contracts or working with local authorities may need £5 million or even £10 million in cover—not because they’re riskier, but because it’s a contractual standard. Event organisers, contractors in schools or hospitals, and suppliers to local councils are often required to show proof of this higher-tier cover.
If you’re unsure, start by checking client terms and supplier agreements. Then weigh up the scale of the claims you’re likely to face. The cost of cover often increases modestly between levels—so stepping up your protection can be surprisingly affordable.
How much does general liability insurance cost?
The average cost of general liability insurance in the UK ranges from £50 to £250 per year for small businesses—but the exact premium depends on your trade, turnover, and required cover limit.
The higher the risk or policy limit, the higher the price.
A self-employed cleaner might pay around £60–£100 per year for £1–2 million in cover, while a builder working in clients’ homes may see quotes upwards of £200, especially with £5 million of protection. Businesses bidding for council contracts—where £10 million cover is often expected—may still pay less than £20/month, depending on their claims history and risk profile.
What affects the cost?
- Your industry – Higher-risk trades pay more (e.g. construction, events).
- Cover limit – £5M and £10M policies cost more than £1M, but not always significantly.
- Business size – More employees, more turnover = higher premiums.
- Claims history – Previous incidents will increase risk loading.
The good news? Cover is often cheaper than expected. Many providers now offer flexible payment plans, and the jump from £1M to £5M is rarely as steep as business owners fear.
Related Read: How Much Does Public Liability Insurance Cost In The UK?
How can I get general liability insurance?
You can get general liability insurance online in just a few minutes—by comparing quotes from specialist providers and tailoring cover to your trade and risk level.
Most insurers offer instant pricing and flexible policy options, even for sole traders or small teams.
The key is knowing what you need before you apply. Start by confirming:
- Whether your clients or contracts require a specific cover limit (e.g. £5M or £10M)
- The nature of your work and how much contact you have with the public
- Any recent claims or incidents that might affect your quote
Many comparison platforms will let you choose optional extras—like tools cover, employers’ liability, or professional indemnity—so you can bundle everything in one go. But don’t over-insure for the sake of it. Match the policy to your actual operating risks.
Final thoughts
General liability insurance isn’t just a box to tick—it’s a business essential for anyone whose work brings them into contact with people, places, or property they don’t control. It protects your business when things go wrong, whether that’s a trip hazard, a scratched surface, or a claim that spirals into legal action.
In the UK, the term might differ—“public liability insurance” is the more common phrase—but the purpose is the same: financial and legal protection when your business activity causes harm. If you deal with clients, attend events, or operate on third-party premises, this policy isn’t optional—it’s practical self-defence.
The good news? It’s affordable, easy to arrange, and widely customisable to fit your trade, turnover, and risk profile. The better news? It might one day save your business from a claim you never saw coming.
Frequently Asked Questions (FAQs)
Yes—while the term “general liability” is American, in the UK it typically refers to public liability insurance, covering injury or property damage claims from third parties.
No. Claims involving employee injury or illness are covered under employers’ liability insurance, which is legally required for most UK businesses with staff.
Yes, if your work involves public interaction or visiting clients. Sole traders are still exposed to third-party claims and often more financially vulnerable to them.
Yes. Many insurers offer one-day or short-term public liability insurance for events, markets, exhibitions, or temporary contracts.
Yes. It’s typically considered an allowable business expense by HMRC and can be deducted from your taxable income.
You’ll be personally liable for legal costs and any compensation. This could run into thousands, or more, depending on the incident.
Not by default. You’ll need to check your policy for territorial limits or add international cover if you work overseas.
Yes. Sole traders, freelancers, and partnerships can all get cover. Your business structure doesn’t affect eligibility.