What is the difference between employers’ & public liability insurance

Is employers’ liability insurance the same as public?

The difference between public liability and employers’ liability insurance is who the claim against you or your business is being made by.

If the claim is being made by someone inside your company, you could be covered by employers’ liability insurance. This form of cover is designed to protect your business if an employee claims they have suffered from a work-related injury or illness. While they’re at work, the health and safety of your employees is your responsibility. For example, if an employee falls off a ladder in your warehouse, you may be held liable. Employers’ liability insurance could cover the cost of a legal defence and any compensation pay-outs.

If the claim is being made by someone outside your company, you could be covered by public liability insurance. This form of cover is designed to protect your business if a client or member of the public claims that your business activities have resulted in accidental injury or property damage. Public liability cover could pay-out for legal costs and compensation if, for example, you spill coffee over a client’s laptop or a member of the public trips over a loose floorboard in your shop and injures themselves.

Product liability is another form of liability cover that protects against claims of injury or property damage caused by a product sold by your business. This type of policy can cover the cost of legal defence and compensation pay outs if a product is defective and, for example, a faulty toy harms a child or a kitchen appliance malfunctioning causes a fire.

What is employers' liability insurance?

What is public liability insurance?

Does public liability insurance cover employees?

Public liability insurance covers your business if a claim is made against you by a client or member of the public. It does not cover you if an employee makes a claim against you, that would be covered by employers’ liability insurance.

Do I need both employers’ liability and public liability insurance?

In terms of necessity, the difference between employers’ liability and public liability is that the former is a legal requirement and the latter isn’t.

If you have any employees, including temporary workers, freelancers, unpaid volunteers, students and trainees, you are required by law to have employers’ liability insurance with at least £5 million of cover. There are some exceptions, for example, if you are the sole employee of your limited company and own more than 50% of the shares, or your employees are close family. However, even in these circumstances, it might be required for some client contracts. Failing to have this insurance can result in hefty fines of up to £2,500 per day.

While not a legally required cover, public liability insurance something you may want to consider if you have any contact with customers or members of the public in a business capacity. Even if you work from home, if you attend client meetings, have customers visit your home office or market your business at trade shows, you’re putting yourself at risk.

How much does employers’ liability and public liability insurance cost?

Employers’ liability and public liability cover can usually be bought separately or together as part of a business insurance package. The cost will depend on a number of factors, such as:

• The size and location of your business
• The industry you work in and nature of your business
• Your business turnover
• Your health and safety record

The level of insurance cover you’ve chosen will also be a factor. For employers’ liability, legally you must have at least £5 million. For public liability, you may be required by clients to have a minimum level of cover.

Follow the links to our FAQ guides if you want to know more about how much you should expect to pay for public liability cover. Otherwise, you can request a quote and get a figure from Hiscox right away.

Get a quote for employers’ liability or public liability insurance

When comparing policies from different insurers, it’s worth remembering that while price comparison websites are helpful, they’ll usually only provide a brief overview of the policies. Doing your own research will allow you to identify what types and what level of cover you may need for your specific business. A quote from Hiscox will be specially tailored to your business needs, giving you the confidence that, should anything go wrong, you’ll have adequate cover.