Employers And Public Liability Insurance - Do I Need To Have Both?

There is sometimes confusion about commercial liability insurance for businesses, because there are different types and it is not always obvious what they are for and who needs to have them. This article is about the differences between what are known as employers liability cover and public liability cover. Both are important types of protection for employers, so any business manager or owner needs to understand their purpose and the laws that relate to them.

The most important thing to understand to begin with is that in the UK employers liability is compulsory for all businesses. If you have a business and you employ staff, then you must have a policy in place to cover those people. This is all about making sure that there is proper protection in place for all employees in case of any kind of injury or disease that comes about as a result of their employment.

This protection is not optional and is required under the Employers Liability (Compulsory Insurance) Act of 1969 and you can be fined if you do not have an appropriate policy in place. All business owners have responsibilities under health and safety law anyway, but what the employers liability cover does is ensure that staff are properly compensated for injury or illness, even if the employer has been negligent. Insurance companies have to pay out for such claims even if the business in question did not have proper systems or policies in place, or even if they did not comply with some piece of safety legislation.

The minimum amount of cover a UK business must have in place is for five million pounds. Depending on the nature of your work and the risks involved, you may need to have more than this, but you can never have less.

Public liability insurance on the other hand is all about protection against claims from third parties, meaning other businesses or members of the public. This type of policy is not normally compulsory, though in some industries it is in effect impossible to practice without is because clients will insist on it before doing business.

Public liability cover is really just a sensible safeguard against the many possible types of claim that could be made against almost any business for personal injury or damage to property as a result of carrying out your work. Some industries are obviously more likely to be open to claims than others, but there are few for whom this protection can be seen to be unnecessary. If your line of work involves going out and working on other premises or in public areas, then there is clearly a strong need and high potential risk. Even if you do not carry our work outside your own premises, there are risks involved if you ever have clients or members of the public on your own premises. The only people with little or no risk are those who perhaps work at home, never visit clients and never invite anyone into their home on business.

The very nature of third party claims for injury or damages is such that it can easily amount to very large sums of money, which makes this type of policy simply sensible business practice for most employers.