Warning for UK businesses as liability claims soar

As a wave of public liability claims continue to batter UK businesses, owners are warned of simple ways they could accidentally void their insurance and be left unprotected.

Government figures suggest nearly one in five businesses suffer a major disruption every year – 80% of which close down within 18 months.

Business insurance protects against financial loss while undertaking business related activities and can range from commercial property insurance to professional indemnity, employer and public liability insurance – protecting the property, staff, their reputation and the public.

According to data from the Compensation Recovery Unit (CRU), public liability claims have surged over the last five years across England, Scotland and Wales.  April 2023 to March 2024 saw 58,933 claims, rising to over 64,423 claims in 2024 –25 – with a year-on-year increase of approximately 10% for three consecutive years.

Reflecting the increase in claims is a swell in demand for public liability policies.  Quotezone witnessed a 30% spike from Q1 2023 to Q1 2024 and a further 14% boost from Q1 2024 to Q1 2025, as businesses hunt for cover.

Greg Wilson, public liability insurance expert and CEO of Quotezone.co.uk, said: “It’s worrying to see public liability claims are steadily increasing year on year, likely a knock-on effect from current financial pressures and the rise of fraudulent claims.

“It is positive however to see companies respond with growing demand for public liability cover.  It’s vital for companies to protect themselves and their assets. Business insurance covers all sorts of risks, such as disgruntled customers or damage to the business premises.

“It is important though for businesses to be careful not to accidentally invalidate their policy, it’s not uncommon for providers to deny claims if they feel the agreed terms have not been met.

“Simple things like keeping the provider up to date on any changes to the business, making sure the premises are secure and providing accurate details when taking out insurance helps ensure the cover stays valid and the business is protected.”