Employers And Public Liability Insurance: Are They Both Compulsory?

Employers Liability and Public Liability are two different types of insurance cover. They are sometimes confused as being the same thing and they are often purchased together, but they serve entirely separate functions. One of the main differences that business owners and managers need to be aware of is that employers liability insurance is compulsory in the UK, whereas public liability is not.

Let us first be clear about what the differences are and what each type of policy is intended to protect you against. Employers liability is all about staff that you employ in your business. The insurance is to safeguard you against possible claims of negligence or damages by staff who work for you. To give an obvious example, one of your workers may have an accident and suffer an injury while working for you. Your policy will cover you against a claim from this employee that you were negligent in your duty of care or that their injuries are as result an act of negligence on your part. This cover is compulsory for all UK businesses and as well as providing a protection for workers it protects businesses against what can be very substantial claims for damages and legal costs.

Public liability on the other hand is concerned with claims that may come from third parties. By third parties we mean people outside of your business, such as clients or customers, but this also includes anyone else at all. This protection is about claims for damages to the property or goods belonging to third parties, or personal injuries to such people too.

As it is not mandatory to have this type of policy in place, it is up to each business to decide whether it is necessary, and how much cover to put in place. These are decisions that only you can make, but you should think very carefully before deciding that you can do without this type of protection. The only people who could legitimately say that they are not likely to run any risks that would be covered under such a scheme would be those who work at home, do not employ staff, never work outside of their home and never have clients visit them where they work. Clearly a few people fall into this category, but not many businesses of any reasonable size.

The sort of thing you are guarding against with public liability protection is any situation where you may cause damage to property or injury to people as a result of your business. This is not just in the very direct sense, but also incidental issues such as someone falling over something that you or your worker left on the ground. It could also be someone visiting you at your place of work, even if it is your home.

Imagine you have a bit of a ruck in your carpet. While you are used to it being there, a visitor to your home is not, and they might trip on it and have a fall. There are countless possible scenarios with even the smallest and simplest of businesses and any personal injury claim could potentially lead to prolonged and very expensive claims. A single such occurrence can spell the end of your business if you do not have adequate cover in place to pay the legal and other costs involved.