What is the difference between employers’ & public liability insurance

Public liability and employers’ liability are types of business insurance. The main differences between the two comes down to who is making the claim against you or your business.

If someone inside your company is making the claim, 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 a work-related injury or illness.

In contrast, if someone outside your business is making a claim, you could be covered by public liability insurance. This type of cover is designed to protect your company if a client or member of the public claims that your business activities have caused them accidental injury or property damage. 


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

In terms of necessity, the difference between employers’ and public liability insurance is that the former may be a legal requirement (external link) but the latter is typically not.

If you have employees, you’re required by law to get employers’ liability insurance covering at least £5 million. This includes:

  • temporary workers
  • freelancers
  • unpaid volunteers
  • students
  • trainees.

Failing to have this insurance could result in fines of up to £2,500 per day.

There are some exceptions from being legally required to have EL. For example:

  • you’re the sole employee of your limited company and own more than 50% of the shares 
  • your employees are close family members.

Public liability insurance is not typically legally required. But it can be for the likes of horse-riding establishments, for example [1]. And some contracts may require a minimum level of PL cover.

It’s something you may consider if you have contact with customers or members of the public in a business capacity. Even if you work from home, attend client meetings, have customers visit your home office, or market your business at trade shows, you could be putting yourself at risk.

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

You usually purchase public and employers’ liability insurance    together as part of a wider business insurance package. However, the exact cost will depend on several 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 choose will also be a factor. For employers’ liability, you must legally have at least £5 million in cover if you employ staff. For public liability insurance, clients may require you to have a minimum level of cover. Explore how much you should expect to pay for public liability cover