Risk & Insurance
Difference between Public Liability and Legal Liability
Here’s what you need to know about the difference between Legal Liability and Public Liability

There are many different insurance policies you may want to consider when running a small business, and understanding the various covers can help you make an informed decision. One of these insurance policies is Public Liability insurance. We often get asked what the difference is between Public Liability and Legal Liability. While they might both sound like insurance policies only Public Liability is a type of insurance policy. Legal liability on the other hand is a type of legal responsibility that can result from your action or inaction. The purpose of a Public Liability Policy is to help cover sums you may be legally liable to pay as a result of such action or inaction. Let’s look at the two in a bit more detail…

What is Public Liability?

A Public Liability policy can provide cover if your business is held liable for bodily injury or property damage to a third party. If legal action is taken against you in such an event, Public Liability can help cover the legal fees associated with defending you, as well as compensation you might be required to pay a third party. Public Liability is not mandatory, but it is an important cover to consider holding for businesses who have any interactions with members of the public.

Any business with a physical site where clients can enter may want to consider this cover because of the possibility of personal injury from events like slips, trips, and falls. Even if your business does not have a physical office or site, there may still be a risk exposure if you meet with clients offsite such as at a café or the business premises of your client. Public Liability Insurance may even assist your busines if you do not have an office as it can cover legal liabilities for third party injury and property damage arising from your business activities.

What is a Legal Liability?

Although the name might make it sound like another type of insurance policy, legal liability is not a type of insurance policy. It is a legal concept. A public liability insurance policy is designed to assist your business if it becomes legally liable for third-party personal injuries or damages third party property.

One way to establish that a legal liability is owed by your business , is to prove that you were negligent, or breached your duty of care. In order for compensation to be payable a result of negligence, it would also need to be proven that the the other party suffered a loss as a direct result of a breach of duty. The obligation to pay compensation to a third party (ie by court order or negotiated settlement) is a legal liability.