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.

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.

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 (CRU), the number of public liability claims made in the UK in 2024/25 was 64,423. The figure has risen steadily over the past four years, after a pandemic-era low in 2020/21. Since then, the number of PL claims has increased 26%. If the rate continues to climb at current rates, then the estimate for 2025/26 would be around 68,549 public liability claims.

Lower claims figures could be the result of insurers and businesses placing a higher focus on risk management and digital safety protocols.

Public liability examples

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.

Workplace injuries remain a constant risk for UK businesses. According to the latest Labour Force Survey (LFS) data for 2024/25, there were 2,070 self-reported non-fatal injuries per 100,000 workers. In contrast, the rate of more serious injuries reported by employers under RIDDOR stood at 209 per 100,000 employees, reflecting a continued downward trend in formal reporting despite a rise in overall incidents.

Workplace accidents carry significant financial consequences. The latest Health and Safety Executive (HSE) estimates for 2024/25 show that a fatal workplace accident costs a business £124,000 on average. Serious non-fatal injuries (resulting in at least 7 days of absence) cost a business over £8,400. These costs account for lost productivity, administrative burdens, and recruitment, though the human cost to employees is much 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.

Employers' liability examples