What is the difference between public liability and employers’ liability insurance?

Public liability insurance and Employers’ liability insurance are both types of business insurances that cover you for different situations and for claims made by different groups.

Public liability

Public liability insurance protects you if a third party makes a claim against you because they were accidentally injured, or their property was accidentally damaged due to your business.

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Employers’ liability

Employers’ liability protects your employees and anyone your business is responsible for if they’ve been accidentally injured or fallen ill as a result of working for you.

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Let’s take a look at how this works for a claim

During a typical British day, the floor of your café is soaking wet from the water dripping off of umbrellas and coats.

If a customer slips and sprains their ankle, this is a public liability claim
If the waitress falls and sprains her ankle, this is an employers’ liability claim

You own a construction company and have a small team currently working on some exterior repairs on a house.

If one of your employees drops a hammer from the top of the scaffolding and it lands on the client’s car and smashes their windscreen, this is a public liability claim
If your scaffolding is not properly connected and one of your employees falls from a height and breaks their leg, this is an employer’s liability claim

You’re a well-established hairdresser who has series of loyal of customers for colouring and styling.

If you take on a new client and fail to do a proper patch test, causing the customer to have a nasty allergic reaction to the dye, this is a public liability claim
If one of your hairdressers starts developing chest problems because of years working with different chemicals, this is an employers’ liability claim

Are the cover limits for Public Liability Insurance and Employers’ Liability Insurance the same?

No, these two products have don’t have the same cover levels.

With both, the minimum cover level is £1 million.

However, public liability insurance has a maximum cover level of £5 million, where employers’ liability insurance has a higher maximum limit of £10 million.

How much cover do I need?

How much cover is required will depend on several factors that will vary from business to business. These factors include:

The size of your business
The type of business you have
Your claims history
Risk appetite and business activities
Contractual obligations

Are either of these covers a legal requirement?

Public liability is not a legal requirement, however for some occupations (such as trades) clients may request that you have this cover before taking you on for work.

If you have anyone – in ant capacity – working for you then yes, employers’ liability is a legal requirement under the Employers’ Liability Act 1969. You can be fined up to £2,500 for every day you’re not insured.