A guide to Employers' Liability and Public Liability Insurance

Enterprise Nation sponsor AXA is launching online Public Liability and Employers' Liability products on 8th December. AXA small business insurance expert Sarah Clements explains what each of them is for and why you might need them in your business. As you would expect, we have carried out lots of research to make sure these products meet your business needs and that is it both clear and easy to get a quote and buy online.

In the research groups, however, we realised that people are very confused by the different types of business insurance and if there are any legal requirements on what a business must have. 

Therefore this month we thought we'd talk about the two new products and what they are for.

What is Employers' Liability Insurance?

Generally speaking, it is a legal requirement for businesses to have Employers' Liability cover where they have employees. There are a few exceptions.

For example if you are a family business, only employing close family members, and not set up as a limited company you are exempt. You are also exempt if your company only employs you, you are the owner and you own more than 50 per cent of the shares in the business. Otherwise every business has to have it. This applies to home workers, too. If you control when, where and how somebody works for you and you are responsible for their actions you must have it in place. This is whether you deduct National Insurance contributions and income tax from a salary you pay to someone, or if they volunteer their services.

What is Employers' Liability insurance for? It protects your employees (including you if you are an employee of your own company) from any injury, illness or disease sustained as a result of their work whilst they are employed by your business. If an employee makes a claim against your business because of an injury incurred in the workplace, or if they make a claim against your business in the future because of an illness resulting from their work whilst you employed them, the claim is made against the Employers' Liability insurance policy that was in place at the time.

The legal minimum is £5m of cover but most people choose £10m of cover and a lot of insurers only offer £10m cover. All employers must also display their Certificate of Employers' Liability Insurance wherever employed persons are covered by the policy.

What is Public Liability Insurance?

Public Liability insurance is different. It covers businesses for claims made against them by members of the public or other businesses, but not claims made by employees. If you have customers, clients or business partners who visit your home or work premises or if you visit their premises to conduct business you need Public Liability insurance to protect you. For example, if a client tripped and fell at your home while visiting you for a meeting, the claim would be made against your Public Liability policy. Or, if you were a tradesperson and you accidentally broke a client's window, or a visitor to the client's home tripped over your tool kit, they might claim against your Public Liability insurance. There is no set limit of cover for Public Liability.

We have designed our new products to let customers choose the most appropriate level of cover and provided a range of cover options and features so you can select what is most relevant for your business. This will give you the reassurance and peace of mind that comes from knowing your business is properly covered..