What is the difference between employers’ liability insurance and public liability insurance?

If you’re a tradesperson working in the construction industry, it is essential to have the correct insurance in place. This includes employers’ liability insurance and public liability insurance.

What is employers’ liability insurance?

It protects your business if someone you employ (or used to employ) suffers some sort of injury or illness as a result of working for you.

A wide range of problems are covered: from falling over something at work and breaking an ankle to a life-threatening disease, losing a limb or even death.

Do I need employers’ liability insurance?

If you employ anyone, the law requires you to have employers’ liability insurance. This is the case even if your employees are only part time, temporary, volunteers, trainees or apprentices.

If you don’t have employers’ liability insurance cover of at least £5 million, you can be fined daily.

What is public liability insurance?

It protects you and your business if a member of the public (or client) suffers injury or damage to their property as a result of something your business does.

Again, this can include a broad range of circumstances: from something quite minor like bodywork damage to a car, to something more serious like a disabling personal injury or fatal accident.

Do I need public liability insurance?

Although you are not required to have public liability insurance, it is an important consideration if you come into contact with the public.

Many large clients and public sector organisations may insist you have public liability insurance as a term of their contracts. You may also find that many trade associations insist you have it to be a member.

Even small incidents can result in a large claim against you. Dealing with a claim can also mean taking time off work to handle legal proceedings or paying for a solicitor to represent you.

Without insurance, the costs involved must be paid by you or your business. This can be financially crippling for an SME. If you can’t pay, your business and assets may be at risk.

Does it matter how my business is set up?

The requirements and reasons for having insurance are the same, whether you are self-employed or set up as limited company or partnership.