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The difference between public liability and employers’ liability insurance is that public liability insurance can cover your business in the case of third party compensation claims, while employers’ liability insurance can cover you in the case of employee (or ex-employee) injury compensation claims.
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Both public liability and employers’ liability insurance are business covers that can pay out if your business faces a compensation claim for injury. The difference is that public liability insurance covers claims made by a third party (i.e. a member of the public like a client, customer, supplier or passerby), while employers’ liability insurance covers injury claims made by an employee.
Public liability insurance isn’t a legal requirement, although it may be required by your client contracts. It’s particularly important for businesses that come into contact with the public, for example shops, restaurants, tradespeople and salons. If someone blamed injury or damage on your business and sued, you could face hefty legal fees and an expensive settlement. Your public liability insurance could help pay this.
It’s important to understand that public liability insurance won’t cover compensation claims made by employees or former employees for injury that they’ve suffered in the course of their work. To cover this risk, you need employers’ liability insurance, which is a legal requirement for most businesses with employees. Some types of subcontractors count as employees for the purposes of the legislation, and part-time and temporary workers are also included. For more information, see: Do I need employers’ liability insurance?
In terms of cover levels for public liability vs employers’ liability insurance, Simply Business offers between £1 million and £10 million of public liability insurance. For employers’ liability insurance, £5 million of cover is the legal minimum, but Simply Business offers £10 million as standard.
You can buy both covers in a single business insurance policy.
Public liability insurance doesn’t cover claims made by employees. It’s designed to cover compensation claims made by a third party - for example a client, a customer, a supplier, or another member of the public - because they’ve been injured or their property’s been damaged by your business.
Public liability insurance is designed to cover members of the public rather than employees. Employers’ liability insurance is the insurance you need to cover injury or damage claims made by a member of staff. This insurance is a legal obligation for most employers.
Going back to public liability insurance, a ‘member of the public’ could mean pretty much anyone your business comes into contact with, from a customer who enters your shop to a pedestrian who passes your construction site.
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