Employers' Liability vs Public Liability Insurance Claims Explained

Employers' liability and public liability are by far the two most common types of business liability insurance in the UK, and are the core coverages in most small business insurance policies. But what's the difference between the two—and do you need both? We explain the differences in coverage and claims below.

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Difference between Employers' Liability and Public Liability

Both employers liability (EL) insurance and public liability (PL) insurance cover personal injury situations where your company may be to blame, but EL covers claims made by employees and PL covers claims made by third parties like customers, clients, vendors and passersby.

  • Employers' Liability covers injury or illness claims made by employees
  • Public Liability covers injury or damage claims made by third parties (e.g., customers, clients, vendors and passersby)

If there's an accident, which policy does your company claim on? It depends who is making the claim against the business. If it's an employee who was injured or made ill by work, your business would claim on its employers' liability policy. If a third party like a customer or member of the public is injured or their property is damage, your business would claim on its public liability policy.

Public Liability Claims

A public liability claim occurs when a member of the public suffers bodily injury or property damage—and the accident happened because someone else was responsible for ensuring the safety of the area but failed to do so. Public liability claims can be made against businesses, local authorities or other entities that are responsible for maintaining premises to a safe standard.

Whenever a member of the public is in a public place such as a park, restaurant, shop, station, or even walking down the street, the organization responsible for the area has a duty of care to ensure a safe environment. This is to avoid members of the public slipping, falling, tripping, being hit by falling objects, getting burned or scalded, being exposed to hazardous chemicals and more.

According to the Compensation Recovery Unit the number of public liability claims made in the UK in 2019/2020 was 72,587, down from 85,472 in 2018/2019 as you can see in the chart below.

Chart showing the number of public liability insurance claims in the UK

Public liability examples

  • A cafe is busy during a storm when customers flock in to avoid the rain. The tile floor near the counter becomes quite wet and is not mopped up, causing a hazardous situation. An elderly customer slips on the wet floor and falls, breaking her hip. She sues the cafe.
  • A construction company is working on a scaffolded building site in a busy area. One of the workers leave a screwdriver on the scaffolding, which is subsequently kicked off by another worker as they walk by. The tool falls and strikes a man walking by. He is injured and sues the building company, which claims on their construction insurance.

Employers' Liability Claims

An employers' liability claim occurs when an employee of a company suffers bodily injury or illness—and the company is to blame by not providing a safe work environment.

Employers have a duty of care to their employees, and are responsible for providing employees with a safe working environment. This means an employer must provide adequate job training, sufficient equipment and a safe system of work. Employers that don't implement the correct health and safety protocols are liable to being sued by employees who are injured or fall ill as a result.

Unfortunately, workplace injuries are quite common. According to Labor Force Survey (LFS) workplace injury data there were 1,609 workplace injuries per 100,000 employees in 2018/19—plus another 254 injuries per 100,000 employees were reported to RIDDOR.

As you can see below, the most common workplace injuries are carrying injuries when handling or lifting, followed by slipping or tripping injuries.

Chart showing the 10 most common workplace injuries
Most common causes of workplace injuries

And workplace accidents result in expensive claims. According to data from the Health and Safety Executive (HSE), a fatal workplace accident costs a business £100k on average. Serious but non-fatal injuries that keep an employee off work for at least 7 days end up costing a business over £5,000. The cost to employees is even higher.

This is where employers' liability insurance comes in. When an employee is injured or falls ill due to their work, they can make an employers' liability claim. In nearly every situation, compensation paid to an employee is paid out by the employers’ liability insurance company—not by the employer.

In 2019/20 there were 79,027 employers' liability claims registered with the CRU, down from 89,461 in 2018/19.

Number of employers liability claims UK

Employers' liability examples

  • A builder suffers a serious spinal injury after falling from height when scaffolding collapses.
  • A data researcher suffers from repetitive strain injuries to their wrists due to excessive use of the computer at work.
  • A stockist trips over boxes in a warehouse and injures his arm.

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