Public liability insurance for tenders: how much?

The short answer on public liability insurance for tenders: it depends on the contract, the buyer sets the figure, and you will need the tender documents to find it. You also don’t have to buy higher cover before you win. Under the Procurement Act 2023 a buyer cannot require insurance for performing the contract to be in place before it awards the contract (s.22(3)(b)). So “£10m public liability” in a tender doesn’t automatically rule out a firm with £5m today.

What public buyers ask for, and where it’s written

Buyers can set “conditions of participation” to check that you have the legal and financial capacity, or the technical ability, to do the job. Insurance is one of the things they may ask about. Each condition must be a proportionate means of ensuring that capacity, and buyers must weigh the contract’s nature, complexity and cost (s.22(1) and (5)).

Where you see it matters. In the week to 10 Oct 2026, 29 of 470 live notices (about 6%) stated insurance requirements in the notice itself (as of 10 Oct 2026; how we count). For other notices, any insurance requirement will be in the tender documents, if there is one. Our guide to reading a tender notice shows where to look.

How much cover do buyers ask for?

There is no standard figure. Levels vary with the risk of the work and with the buyer’s own policy, and a figure in one buyer’s supplier guide is that buyer’s choice, not a legal rule.

We haven’t published counts of the levels stated in live notices yet, so we won’t give you a “typical” number. When we do, it will appear here with a date. Until then, read the pack and check three things: the amount, whether it applies per claim or in total, and when the cover must be in place.

You don’t have to buy it before you win

The Act’s rule is in s.22(3)(b). The gov.uk guidance (para 18) explains why: businesses shouldn’t pay for cover they may never use, with no guarantee of winning the work.

What a buyer can still do (para 19):

• Consider whether the level it wants is really necessary.
• Make it a condition that you will hold the required cover when the contract starts, and ask for evidence.
• Accept either a certificate showing existing cover, or a letter from an insurer confirming it would provide the cover, plus your commitment to take it out.

If you rely on the insurer’s letter, the buyer must verify the cover is in place before it awards the contract. So the rule is about timing, not about whether you need insurance at all.

Your cover is lower than the tender asks: what to do

Get an insurer’s letter confirming they’d increase cover on award

Ask your broker or insurer for a letter saying they would provide the required level if you win. This is the route the guidance (para 19) describes. Ask for it early, since it can take time.

Ask a clarification question if the level looks disproportionate

If a £10m requirement sits on a contract that looks small or low-risk, ask the buyer through the tender portal why. Conditions must be proportionate to the contract’s nature, complexity and cost (s.22(5)). Keep the question polite and specific.

Bid with a partner

A supplier is treated as meeting a condition to the extent an associated supplier does. Suppliers are associated if they tender together, or if the buyer is satisfied one will subcontract to the other or guarantee the other’s performance (s.22(8)-(9)). A partner with higher cover may fill your gap. Check how the pack wants this evidenced.

Price the extra premium into your bid

If you do need more cover, get a quote before you price. It is a real cost of the contract, and better in your price than a surprise after award.

Employers’ liability: the cover the law requires of employers

Employers’ liability (EL) is different from the rest. Every employer carrying on business in Great Britain must insure against liability for injury or disease to its employees arising from their work there (Employers’ Liability (Compulsory Insurance) Act 1969, s.1(1)). The minimum is not less than £5 million for claims from any one occurrence, and a parent company and its subsidiaries are treated as a single employer (1998 Regulations, reg 3).

gov.uk says you must use an authorised insurer. You don’t need EL if you only employ close family, such as a spouse, parent, child or sibling, or someone based outside England, Scotland and Wales. The 1969 Act’s exemption is for employees who are relatives of the employer (s.2(2)(a)), so if you trade through a limited company, check with your insurer. gov.uk lists fines of £2,500 for every day you are not properly insured, and £1,000 for failing to display your certificate where employees can access it.

Because EL is a legal duty that exists outside any contract, the guidance (para 20) says a buyer can require it as a condition of participation. So a buyer may ask for your EL certificate at bid stage. If you have staff and no EL, fix that before you bid.

The 1969 Act covers Great Britain. Different legislation applies in Northern Ireland, so check with your insurer. Our Northern Ireland page lists live tenders there.

A quick check before you submit:

• Is the amount in the pack per claim, or in total for the year?
• Do you have your employers’ liability certificate to hand?
• Have you asked your insurer for a letter, if your current level is lower?
• Does the pack say when the cover must be in force: at contract start, or earlier?

Give your broker the exact wording from the pack rather than a summary, so the quote matches what the buyer asked for. If the cover looks out of reach, our bid or no bid guide helps you decide whether the contract is worth pursuing.

Public liability vs professional indemnity

Public liability and employers’ liability are separate policies, and neither replaces the other. If you give advice or design work, buyers may also ask for professional indemnity insurance. The same “not before award” rule applies to it. Turnover tests are a different kind of condition, covered on our financial standing page.

Older procurements and Scotland

The Act applies to procurements commenced on or after 24 February 2025 (PPN 014, para 7). Older procurements run under the previous rules (formerly Public Contracts Regulations 2015, reg 58 is now revoked), so check the notice date.

Devolved Scottish authorities are outside the Act (s.2(5)(a)) and procure under the Public Contracts (Scotland) Regulations 2015. The “not before award” rule above is in the Act, so don’t assume it applies to a Scottish council’s tender. Ask or check the pack.

Our tender eligibility checker is coming soon. Until then, tell us your trade and postcode to join the free weekly list of live tenders, starting soon.