Many small business owners find the difference between public liability and employers' liability insurance confusing and understandably so. Both offer financial protection if something goes wrong, but they apply in different situations.
In this guide, we’ll explain what each type of cover protects you against, who needs them, whether they're legally required, and how to work out if your business needs one or both.
Key takeaway: Public liability insurance covers claims from members of the public, whilst employers’ liability insurance covers your employees.
What is Public Liability Insurance?
What it covers
Public liability insurance protects your business if someone outside your organisation (like a client, customer, or passer-by) is injured or has their property damaged because of your work.
Typical claims include:
- A customer trips on loose flooring in your shop.
- A tradesperson accidentally breaks a client's window.
It also covers legal defence costs, solicitor fees, and compensation payouts if a claim is made against you.
Who needs it
Any business that interacts with members of the public should consider public liability insurance.
Common examples include:
- Sole traders like electricians, photographers or decorators
- Shops, salons, cafes
- Event organisers, fitness coaches, tutors
While it’s not a legal requirement in the UK, it’s often expected by clients, venues, landlords and local authorities.
Learn more: What is Public Liability Insurance? Guide & Costs
What is Employers’ Liability Insurance?
What it covers
Employers’ liability insurance covers claims made by employees who are injured or become ill due to their work. That could be a full-time team member, part-time help, or even a volunteer under your supervision.
Common claim examples:
- A decorator falls from a ladder.
- A warehouse worker suffers a back injury from lifting.
- A kitchen assistant cuts themselves on faulty equipment.
This insurance covers medical costs, compensation claims, legal fees, and any court-ordered settlements.
Legal requirements for businesses with staff
Employers’ liability insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969 if you employ anyone in the UK.
This includes:
- Full-time and part-time staff
- Apprentices and trainees
- Temporary workers
- Subcontractors and volunteers under your control
Failing to have valid cover can result in fines of up to £2,500 per day.
Learn more about Employers' Liability Insurance
Public and Employers’ Liability Insurance Explained
Key differences between the two
When businesses need both policies
Many businesses need both types of insurance. If you employ staff and interact with the public, having both public and employers' liability insurance gives you well-rounded protection.
Examples:
- A cafe: Public liability covers customer slips; employers' liability covers injured baristas.
- A landscaper: Public liability covers damage to a client’s fence; employers' liability covers accidents involving hired workers.
Public Liability and Employers' Liability Insurance in Practice
Examples of claims for public liability
- A customer trips over a cable at your market stall.
- A painter knocks over an expensive vase in a client's home.
- A dog walker damages a client's garden fence.
Examples of claims for employers' liability
- An employee falls from scaffolding during building work.
- A temp worker injures their back lifting heavy boxes.
- A junior chef suffers a burn from a faulty oven.
These incidents are all too common and without the right insurance, the financial fallout could land entirely on you.
Do You Need Both Public and Employers' Liability Insurance?
Legal Obligations
- Employers' Liability: Legally required if you employ anyone.
- Public Liability: Not legally required, but often contractually required by landlords, councils, or clients.
Client and contractual requirements
Many organisations expect or demand proof of cover. Not having the right insurance can mean missed opportunities or breached contracts.
Examples from Admiral Business' Referral Log:
- A local council requests EL for tree surgery contractors.
- A school demands £10M public liability cover for decorators.
Having the right insurance can be the difference between landing a job and losing it.
How Much Do Public Liability and Employers' Liability Insurance Cost?
Factors that affect pricing:
- Business size and annual turnover
- Number of employees (for EL)
- Industry risk level (e.g. scaffolder vs designer)
- Claims history
- Chosen indemnity limits (e.g. £1M vs £10M)
Typical costs for small businesses
As a guide, a builder with £1M public liability cover, 5 years' experience and 1 extra employee could pay around £20 a month or £240 a year.
- Public Liability: From £6.51 a month* for a single builder with £1M cover.
- Employers' Liability: Adding one manual labourer could cost from £13.55 a month**.
The price you pay will depend on your trade, level of cover, experience, claims history and the number of employees you include on your policy.
*£6.51 per month is based on a single builder with £1,000,000 public liability cover and no employees. This works out as £78.12 a year if you pay annually. Your price will depend on your business, including the type of work you do, your experience, your claims history and the level of cover you choose. Price correct as of 01 May 2026.
**£13.55 per month is based on adding one extra manual labourer to a Public Liability policy for a builder. This works out as £162.64 a year if you pay annually. The cost will depend on how many people you employ, the type of work they do and your claims history. Price correct as of 01 May 2026.
Getting the Right Cover with Admiral Business
Tailoring insurance to your business needs
At Admiral Business, we offer flexible, tailored policies for:
- Public Liability
- Combined Public and Employers' Liability policies for convenience
We support a wide range of industries:
- Tradespeople
- Professionals and consultants
- Fitness, lifestyle, and creative businesses
Learn more:
Applying and getting covered quickly
- Fast online quotes with no jargon
- Instant cover and documentation
- Friendly UK-based support when you need it
Final Thoughts: Protecting Your Business with the right Liability Insurance
In short:
- Public liability insurance protects against claims from clients, customers or members of the public.
- Employers' liability insurance covers claims from employees who become ill or injured as a result of their work.
If you deal with the public and have people working under your supervision, it’s common for businesses to have both types of cover. It’s important to understand the risks of not having the right protection in place.
Having the right cover isn't just about ticking a box, it's about protecting your business, your finances, your team, and your reputation.
> Get a tailored public and employers’ liability insurance quote from Admiral Business today.