If you freelance, contract or run a small business, two insurance acronyms follow you around: PL (public liability) and PI (professional indemnity). They sound interchangeable. They cover completely different disasters — and in 2026, £1m of public liability averages just £104–£120 a year, so this is not an expensive problem to solve.
Public liability: the physical world
PL pays out when your business activity injures someone or damages their property. A client trips over your laptop bag, you knock a server off a desk, your ladder goes through a window. It is not legally required — but many client contracts and almost all local-authority jobs demand £1m–£5m before you can start work.
Professional indemnity: the world of your work
PI pays out when your work or advice causes financial loss — an error in a design, wrong advice, a missed deadline that costs your client money, a confidentiality slip. If clients sign contracts based on your documents, drawings, code or recommendations, PI is the cover that matches your real risk. Specialists like Hiscox built their reputation here.
Employers’ liability: the one that IS the law
The moment you employ anyone — including part-timers and, in many cases, volunteers — you legally need employers’ liability cover of at least £5 million. Fines for going without run to £2,500 per uninsured day.
What it costs (2026)
- Public liability (£1m): ~£104–£120/year on average; many sole traders pay under £70.
- Professional indemnity: from roughly £8/month for low-risk consultancy.
- Landlord insurance: median ~£285/year — and note that ordinary home insurance does not cover tenanted property.
A practical buying order
1) Employers’ liability if you have staff (no choice). 2) PI if you sell expertise, documents or designs. 3) PL if clients visit you, you visit them, or a contract demands it. 4) Tools/equipment and cyber as your work dictates. Brokers like Simply Business compare multiple insurers in one quote; direct insurers like AXA bundle PL, PI and landlord cover under one roof.
See typical prices and compare providers on our business & landlord insurance page — and when the contract’s ready, sign it free with Signed Docs Republic.
Figures are researched UK market averages correct as of June 2026 (sources include ABI premium trackers and major comparison-site indices) and are not personalised quotes. Some links on our insurance pages are affiliate links — we may earn a commission at no extra cost to you.