Understanding the different types of insurance for your business can feel overwhelming, especially when two key policies sound so similar. Public Liability Insurance and Employers' Liability Insurance are often confused, but they cover very different things. Knowing the difference is essential to making sure your business is fully protected.
In this guide, we explain what each policy covers, who needs them, and why you might need both — especially if you're running a growing or high-risk business.
What is Public Liability Insurance?
Public Liability Insurance covers your business in case a member of the public is injured, or their property is damaged because of your business activities. This includes accidents that happen on your premises or incidents caused by your employees when working off-site.
Example Scenarios:
A customer trips over loose flooring in your shop and breaks their arm.
A delivery driver slips on a wet surface outside your office.
One of your team accidentally damages a client's property during a service call.
Public Liability Insurance covers compensation claims, medical expenses, legal fees, and sometimes repair or replacement costs. It's not a legal requirement in the UK, but it's highly recommended if your business interacts with the public.
What is Employers' Liability Insurance?
Employers' Liability Insurance protects your business if an employee becomes ill or injured as a result of their work. Unlike Public Liability, this insurance is legally required for most businesses that employ staff, even if they are part-time, temporary or volunteers.
Example Scenarios:
A warehouse worker suffers a back injury due to poor lifting procedures.
An office employee develops repetitive strain injury from incorrect desk setup.
A construction worker is injured due to faulty scaffolding.
Employers' Liability Insurance will cover compensation payouts, legal costs, and other related expenses. The minimum legal cover required is £5 million, though many policies offer more.
Do I Need Both Types of Cover?
In many cases, yes — especially if you have employees and interact with clients or the public.
If you only have one type of insurance, you could be leaving your business exposed. For example, a cleaning company that sends staff into client homes would need Public Liability (for third-party property damage or injury) and Employers' Liability (to protect the cleaners themselves).
What Happens If You Don’t Have the Right Insurance?
If you’re legally required to have Employers’ Liability Insurance and don’t have it, you could face fines of up to £2,500 for every day you're not insured. Not only could you be personally liable for injury or illness claims, but the financial consequences can be devastating for your business.
Without Public Liability Insurance, any claim from a third party could result in large legal costs and compensation payouts — potentially putting your business at risk of closure.
Are There Exceptions?
There are a few exceptions to the legal requirement for Employers' Liability Insurance. For example, if you are a sole trader with no employees, or if your employees are all close family members, you might not legally need it. However, it’s always wise to get professional advice to avoid unintentional breaches.
Public Liability Insurance is not mandatory by law, but many clients, suppliers, or venues may require it before doing business with you.
How Much Does Liability Insurance Cost?
The cost of both Public and Employers' Liability Insurance depends on several factors:
The size of your business
Your industry or sector
Number of employees
Claims history
Level of cover required
Small businesses might expect to pay from around £50 to a few hundred pounds annually for each type of policy. Higher-risk industries like construction or manufacturing will pay more, but the investment is often minor compared to the cost of a single
Getting the Right Cover with H.I. Commercial
At H.I. Commercial, we don’t just sell policies — we help you understand what cover you need and why. Based in Hull and serving East Yorkshire and North Lincolnshire, our team takes the time to learn about your business so we can tailor your policy and avoid gaps in your protection.
You won’t find generic advice or confusing paperwork here. Just clear guidance, honest recommendations, and a named contact who stays with you throughout.
Annual Insurance Reviews
Your business can change a lot over a year. That’s why we offer annual insurance reviews to ensure your cover still reflects your operations, staff size, and risks. If anything has changed, we’ll adjust your policy so you’re never caught out by outdated information.
Book a Free, No-Obligation Insurance Review
Not sure whether your current insurance is enough? Let H.I. Commercial give you peace of mind. Book a free insurance review today, and we’ll help you understand whether you need Public Liability, Employers' Liability, or both — and make sure your business is fully protected.
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