Public and Employers’ Liability Insurance Explained

Public liability and employers’ liability are two separate covers that are usually bought together on one policy. Employers’ liability pays claims from your own staff for injury or illness caused by their work, and most employers in Great Britain must hold it with at least £5 million of cover. Public liability pays claims from customers, visitors and other third parties; it is not generally required by law, but clients, landlords and councils often insist on it.

Is employers’ liability the same as public liability?

No. The difference is who is making the claim. Employers’ liability (often shortened to EL) responds when one of your employees is injured or becomes ill because of their work for you. Public liability (PL) responds when anyone else, such as a customer, a member of the public or a client whose premises you are working in, is injured or has their property damaged because of your business.

	Employers’ liability	Public liability
Who can claim	Your employees, including people who are employees in practice whatever you call them	Customers, visitors, members of the public and other third parties
Typical claim	A warehouse worker injures their back lifting stock; a joiner develops a lung condition from dust	A visitor trips over a cable; you flood the flat below while fitting a kitchen
Required by law	Yes, for most employers under the Employers’ Liability (Compulsory Insurance) Act 1969	No, for most businesses
Minimum limit set by law	£5 million for any one occurrence	None
Certificate to display	Yes	No

We cover the dividing line in more depth, including the awkward cases, in our guide to employers’ liability vs public liability. This page is about buying the two together and what to check when you do.

Is employers’ liability insurance a legal requirement?

For most employers, yes. Section 1(1) of the Employers’ Liability (Compulsory Insurance) Act 1969 says every employer carrying on a business in Great Britain must insure, under approved policies with authorised insurers, against liability for bodily injury or disease sustained by employees and arising out of and in the course of their employment. The Employers’ Liability (Compulsory Insurance) Regulations 1998 set the minimum amount at £5 million for claims arising from any one occurrence. GOV.UK says you must get this cover as soon as you become an employer.

The rules that catch people out are:

• The certificate. You must display your certificate where employees can see it, for example at your workplace, on your website or on your work intranet. Since 1 October 2008 employers have been allowed to display it electronically, as long as staff know where to find it. You must also show it to an inspector on request.
• Penalties. GOV.UK says you can be fined £2,500 for every day you are not properly insured, and £1,000 if you do not display the certificate. Under section 5 of the Act, a director or manager whose consent, connivance or neglect led to the company being uninsured is guilty of the offence as well as the company.
• Who counts as an employee. The Health and Safety Executive says it does not matter whether you call someone an employee or self employed, or what their tax status is. Someone you control and supply with equipment may count as your employee even if they invoice you.
• Old certificates. There has been no legal duty to keep expired certificates since 1 October 2008, but the HSE strongly advises keeping them because some diseases appear decades after exposure. Former employees can also trace old policies through the Employers’ Liability Tracing Office.

Our page on employers’ liability insurance requirements goes through the rules in more detail.

Which businesses do not need employers’ liability insurance?

The exemptions are narrow, and each one is lost as soon as your circumstances change. You do not need employers’ liability insurance if:

• Your only employees are close family. Section 2(2) of the Act lists the relatives covered: husband, wife, civil partner, father, mother, grandfather, grandmother, step father, step mother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half brother or half sister. The HSE points out that this exemption does not apply to family businesses incorporated as limited companies.
• Your company employs only its owner, and that person owns 50% or more of the issued share capital.
• You are a public organisation such as a government department or local authority, which the HSE says are mostly exempt.
• Your only employees are based outside England, Scotland and Wales.

A sole director company that takes on a part time administrator, or a family partnership that incorporates, needs cover from that point. If you are unsure, ask before you rely on an exemption: the daily fine runs from the first day you are uninsured.

Is public liability insurance compulsory?

Generally not. The Association of British Insurers says most businesses are not legally required to hold public liability insurance, and names horse riding establishments as one exception that is. The Charity Commission notes there is no statutory minimum level of public liability cover.

In practice, though, many businesses cannot trade without it. Commercial clients and main contractors write it into their terms, landlords put it in leases, councils ask for it before granting market pitches, event permits or work on their property, and venues ask exhibitors and hirers for a certificate. Whoever asks usually sets the limit. See what is public liability insurance.

The figures: UK liability claims statistics.

Why are public and employers’ liability usually sold together?

Most insurers write the two covers as a single combined liability policy, or as two sections of a package policy, and there are good reasons for buying them that way rather than from different insurers.

• No argument over who pays. Some claimants sit on the line between employee and third party: a labour only subcontractor, a casual helper, a student on a work placement. The ABI says students and people on work placements fall under employers’ liability rather than public liability. With one insurer covering both, the claim is handled either way instead of two insurers debating which policy applies.
• One set of underwriting facts. Both covers are priced on the same information: what you do, where you do it, your turnover and wageroll, how many staff and subcontractors you use, and your claims history.
• One renewal and one set of documents. When a client or council asks for evidence of both covers, you send one schedule.

The price is driven mainly by your trade and activities (work at height, heat, demolition or work in occupied homes all count), the size of your wageroll, your turnover, the limits you choose, how many subcontractors you use and whether they carry their own cover, and any past claims.

What limits should you ask for?

For employers’ liability the law sets the floor at £5 million, but both the HSE and the ABI say most policies provide at least £10 million, so that is what most buyers end up with. Check how the limit applies, because costs can sit inside or on top of it.

For public liability there is no legal minimum, so start with your contracts. Look at what your largest client, your landlord and any council or venue you deal with ask for, and buy at least the highest of those. Then think about the worst realistic claim from your work: serious injury to a member of the public, or a fire or flood that damages a client’s building. Also check whether any products cover is limited in the aggregate, meaning one total for the whole year, rather than per claim. Our guide how much public liability insurance do I need works through this step by step.

If a contract asks for an indemnity to the principal or a waiver of subrogation, send the clause to your broker before you sign.

What does a combined policy not cover?

A combined public and employers’ liability policy covers your legal liability for injury and property damage. It is not a general business policy, and these are the gaps we see most often:

• Professional advice and design. If a client loses money because your advice, design, specification or report was wrong, that is a professional indemnity claim. See what is professional indemnity insurance.
• Products. Many combined policies include products liability, but not all, and some limit it to products you supply rather than make or import. If you sell, make, import or brand goods, check the products section or arrange separate product liability insurance.
• Contractual liability. Policies cover liability you would have at law. If you sign a contract accepting liability you would not otherwise have, such as an unlimited indemnity or liquidated damages, the policy may not follow unless the insurer has agreed.
• Your own faulty work. The cost of putting right defective work or replacing faulty goods is normally excluded. The damage it causes to other property is what public liability is for.
• Undeclared activities and subcontractors. Work at height, hot work or work abroad that you did not tell the insurer about, and subcontractors you assumed had their own cover, are common reasons for a claim being disputed.

How does a combined policy work in a real claim?

Example. A shopfitting company has four employees and uses two labour only subcontractors on larger jobs. A retail client’s contract asks for evidence of both public and employers’ liability before work starts, so the company holds a combined policy with one insurer and has declared its subcontractors.

During a refit, one of the subcontractors falls from a stepladder and breaks his wrist. He works only for the company, uses its tools and is told what to do each day, so he is treated as an employee and his claim is handled under the employers’ liability section. The same week, a shopper trips over a cable left across an open aisle and is injured. That claim is handled under the public liability section.

Both claims go to the same insurer under one policy, so there is no dispute over which cover responds. A month later the client complains that shelving the company designed is too shallow for its stock and claims the cost of replacing it. Nobody was injured and nothing else was damaged, so the liability policy does not respond: that is a professional indemnity question, and the cost of redoing the work is excluded anyway.

Frequently asked questions

Do I need both public and employers’ liability insurance?

If you employ anyone and no exemption applies, employers’ liability is a legal requirement. Public liability is not required by law for most businesses, but if you deal with the public, visit clients’ premises or work under contracts, you will usually need it to win and keep work. Most employers who need one need both.

Is EL and PL insurance the same as a combined liability policy?

Usually, yes. EL and PL is trade shorthand for employers’ and public liability, and most insurers sell them together on one combined liability policy, sometimes with products liability as a third section.

I am the only director and employee of my limited company. Do I need employers’ liability?

Not if you own 50% or more of the issued share capital and nobody else is employed. Once you take on an employee, cover is needed from their first day.

Can I have different limits for public and employers’ liability?

Yes. Each section has its own limit. Employers’ liability must be at least £5 million, while the public liability limit is set by your contracts and your own view of the worst claim you could face.

Can Solar arrange a combined public and employers’ liability policy?

Yes, we arrange combined liability for small businesses, sole traders, contractors and landlords. Tell us what you do, your turnover and wageroll, and what your contracts require, and we will look for cover that fits. You can also contact us directly.

Sources

• legislation.gov.uk: Act 1969 c. 57, section 1
• legislation.gov.uk: SI 1998/2573
• GOV.UK: Employers liability insurance
• legislation.gov.uk: Act 1969 c. 57, section 5
• HSE: Hse40
• legislation.gov.uk: Act 1969 c. 57, section 2
• ABI: Employers liability insurance
• ABI: Public liability insurance
• GOV.UK: Charities and insurance

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 31 October 2026. Solar Protect is the trading name of Solar Insurance Services (Medway) Limited, authorised and regulated by the Financial Conduct Authority. This page is general information, not advice on your own cover.