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Employers’ Liability vs Public Liability: What’s the Difference for UK Employers?

workers on site

Employers across the UK face a range of risks when running a business. Whether operating in construction, retail, consultancy, or hospitality, there may be exposure to accidents involving both employees and members of the public. Two key types of cover that often come into consideration are employers’ liability insurance and public liability insurance. While these policies can appear similar, their purposes and applications are distinct.

We explore the main differences between the two, how each can help protect businesses, and what UK employers may need to consider when reviewing their insurance requirements.

What Is Employers’ Liability Insurance?

Employers’ liability insurance is designed to help cover the costs of legal claims brought by employees who have suffered injury or illness as a result of their work. This can include claims related to accidents on-site, long-term exposure to harmful conditions, or failures in training and equipment provision.

Cover may extend to:

  • Legal defence costs

  • Settlements or compensation awarded to the claimant

  • Related expenses such as medical treatment or court fees

This type of insurance may be a legal requirement for most UK businesses that employ staff. It can apply to full-time, part-time, and temporary employees, as well as apprentices or volunteers depending on the nature of the relationship.

What Is Public Liability Insurance?

Public liability insurance can help protect a business if a customer, visitor, or member of the public suffers injury or property damage as a result of the business’s operations. This could involve a client tripping over equipment, a customer slipping on a wet floor, or damage caused during work carried out at a client’s premises.

Key areas of cover may include:

  • Third-party injury compensation

  • Property damage claims

  • Legal defence and settlement costs

While public liability insurance is not legally required, it can be a key safeguard for businesses that regularly interact with the public, clients, or external contractors. Some clients or commercial contracts may also require proof of cover before work can begin.

Key Differences Between the Two Types of Cover

The primary distinction lies in who is being protected:

  • Employers’ liability insurance focuses on employees and internal staff.
  • Public liability insurance is designed for non-employees such as customers or members of the public.

They also differ in terms of statutory obligations. Employers’ liability insurance may be required by law, whereas public liability insurance is typically optional but still widely recommended.

Do Employers Need Both Types of Cover?

Depending on the nature of the business, having both types of insurance in place could be advisable. For example:

  • A building firm with staff working on-site may require employers’ liability insurance to protect employees, while also needing public liability insurance to cover interactions with clients or neighbours.

  • A small retail shop with part-time staff may need employers’ liability insurance and could benefit from public liability insurance in case a customer trips over a misplaced item.

  • Freelancers or consultants without employees may not require employers’ liability insurance but could still be at risk of third-party injury claims, making public liability cover relevant.

Assessing the risks associated with day-to-day operations can help determine the most suitable cover for a business’s unique situation.

How Brokers Can Support Employers

Navigating the differences between policy types and understanding where each applies can be complex. Brokers can assist employers in:

  • Evaluating potential risks within the business

  • Determining whether any insurance may be required

  • Exploring policy options from multiple providers

  • Helping ensure that coverage levels match operational needs

This support can be particularly useful for growing businesses or those entering into new commercial contracts.

Helping Safeguard Businesses Against Liability Risks

Both employers’ liability and public liability insurance can serve as important tools in protecting businesses against unforeseen legal and compensation costs. Understanding the distinction between the two allows employers to make more informed decisions and helps ensure they are not left exposed when it matters most.