Public Liability and Employers' Liability insurance policies are often confused with one another, and as both policies can cover similar claims there does appear to be some overlap on first inspection.
In this guide we explore the differences and similarities between both types of insurance policy, including examples so you can see how each one works and decide if you need one or the other—or both.
Here's a quick overview of the types of risk that are covered by each, as well as any legal requirements, which we'll explain in more detail below:
|Coverage and Requirements||Public Liability (PL)||Employers’ Liability (EL)|
|Damage to public or private property||Yes||No|
|Injury to member of the public||Yes||No|
|Injury to clients or other business representatives||Yes||No|
|Injury to your employees||No||Yes|
|Illness contracted by your employees||No||Yes|
|Required by law||No||Yes|
|Certificate must be displayed||No||Yes|
Tables of Contents
- What is public liability insurance?
- What is employers' liability insurance?
- Can public liability and employers' liability ever cover the same risks?
- Do I need public liability, employers' liability, or both?
- When you need public liability insurance
- When you need employers' liability insurance
- Can I get public liability and employers' liability from the same insurer?
What is public liability insurance?
Public liability insurance covers claims from people outside of your business for injury or damage to their property as a result of your business activities or presence. This type of policy is designed to protect you, your business, and your employees from external legal action and the costs associated with legal defence.
- During a visit to a prospective client you knock over an art installation, causing tens of thousands of pounds of damage. Your potential client sues you for the cost of repairing the piece.
- A customer in your shop suffers a broken leg after tripping over your roomba and falling down some stairs; they sue you for compensation.
What is employers' liability insurance?
Employers’ liability insurance covers claims from your employees for injury or illness caused as a result of their work for you. This type of policy is designed to ensure that employees of UK business are able to claim compensation in the event that their lives are impacted negatively through their employment.
- Your employee gets their hand caught in an automatic shutter door at your office, suffering several broken bones. They claim compensation against you for their injury, citing the door’s lack of safety features.
- Your employee develops carpal tunnel syndrome and alleges that this is due to their use of machinery provided to them by you in the course of their employment. They sue you for negligence in not providing proper training or safety equipment.
Can public liability and employers' liability ever cover the same risks?
In some cases it may appear that an injury could be covered under either policy, but the cause of the injury (employer or third party) will definitively place it in the public liability or employers' liability category. Claims are not typically shared between public and/or employers' liability policies, and both policies will specifically exclude claims which are covered under the other policy.
Do I need public liability, employers' liability, or both?
Employers' liability is the only policy you are legally required to have in the UK, and it's necessary when hiring workers in most cases. If your business has in-person interactions with members of the public or any third parties not employed by you, public liability should be strongly considered (but it's not legally required).
When you need public liability insurance
You need public liability insurance whenever there is a chance that you, your employees or your business activities have a chance of causing injury to others or damage to their property. Even business signs or other promotional material can potentially cause injury to others, so it’s unlikely that you are ever completely immune to public liability claims.
When you need employers' liability insurance
You need employers’ liability insurance if you have any employees. Be aware that the UK government has a broad definition of employees and, whilst there are some exceptions to the rule, it is more than likely that volunteers, apprentices and other pseudo-employees will require you to hold employers liability. You can read the UK Health and Safety Executive guidelines for more information.
Can I get public liability and employers' liability from the same insurer?
Yes! If an insurer provides one type of liability cover for your business, it’s likely that they will also provide the other. Insurers often package these policies into ‘general liability’ policies (although the term is a bit outdated now), which will cover you for both types of claim. It’s also likely that obtaining both covers from the same insurer will result in a lower premium than holding both policies with separate insurers. And some insurers might only sell these EL and PL coverages as a package deal together.