When running a business, having the right insurance is essential to protect against financial risks. Two key types of cover you might need are public liability and employers’ liability insurance — but they serve different purposes.
🛡️ What’s the Difference?
Both types protect your business if a claim is made against it, but who makes the claim determines the cover you need:
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Employers’ Liability Insurance covers claims made by employees (current or former) for injuries or illness caused by their work.
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Public Liability Insurance covers claims made by third parties – such as customers, suppliers, or members of the public – for injury or property damage linked to your business activities.
🧑💼 Examples of Employers’ Liability Claims:
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An employee injures their back lifting heavy stock.
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A former part-time worker develops a work-related condition and seeks compensation.
This insurance is a legal requirement in the UK for most businesses with staff – even temporary workers or volunteers.
🚶♂️ Examples of Public Liability Claims:
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A client trips over a cable in your office and gets injured.
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A passer-by is hurt by falling debris from your building site.
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A customer slips in your shop and damages their personal belongings.
While not legally required, public liability insurance is often essential for businesses that interact with the public. Some clients may even insist you have it before working with them.
⚖️ Legal Requirements:
✅ Employers’ Liability Insurance:
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Mandatory if you have employees.
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Must provide at least £5 million in cover.
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Not having it can lead to fines of up to £2,500 per day.
Exemptions include:
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You’re the sole employee and own over 50% of your limited company.
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You only employ close family members.
✅ Public Liability Insurance:
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Not legally required, but highly recommended.
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Common cover amounts range from £1 million to £10 million.
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Some government or corporate clients may require at least £5 million in cover.
💼 Can You Combine Them?
Yes, many insurers offer combined business insurance packages that include both public and employers’ liability cover. The cost depends on:
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Your industry
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Number of employees
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Business turnover
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Location
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Amount of cover needed
📚 Other Important Insurance Types:
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Professional Indemnity Insurance – Covers you if a client claims you’ve made a mistake or offered poor advice
📌 Summary
| Insurance Type | Covers | Legally Required? | Common Cover Amount |
|---|---|---|---|
| Employers’ Liability | Employee injury/illness claims | ✅ Yes | £5M minimum (often £10M) |
| Public Liability | Claims from the public (injury/property damage) | ❌ No | £1M–£10M |
Protecting your business means preparing for the unexpected. The right insurance helps you do that — legally, professionally, and financially.