Finance glossary
Liability
Also known as: Public liability, Personal liability
In simple terms
Liability cover protects you if you are legally responsible for injuring someone or damaging their property — it pays compensation and legal costs on your behalf.
On this page
What does liability mean?
In insurance, liability cover deals with your legal responsibility to others. Personal liability (often included in home insurance) covers claims if you accidentally injure someone or damage their property; public liability does the same for businesses.
It typically pays both the compensation and the legal costs of defending a claim, up to a limit.
How liability cover works
If someone makes a claim against you — say a visitor is hurt in your home — the insurer investigates and, if you are liable, pays damages and costs up to the policy limit.
Motor and some professional activities have their own specific liability requirements.
How could this affect me?
Liability claims can be very large, so this cover protects you from potentially serious costs. Home insurance usually includes personal liability, but limits and exclusions vary.
If you run a business or a side activity, check whether you need separate public or professional liability cover.
Things to watch out for
- Cover is capped at a limit — very large claims could exceed it.
- Business activities usually need their own liability cover.
- Deliberate acts are not covered.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- ABI, Home insurance explained (opens in a new tab). Accessed 22 Aug 2026.