The main difference between public and employer’s liability, is that employer’s liability is a legal requirement.
In some cases though, public liability may be contractually compulsory, for example when you are working on a local council or government project when you may need £5 million and sometimes £10 million cover.
Public liability is a policy that covers your business in the event of claims arising from third party injury or property damage as a result of your negligence.
Employer’s liability however, will cover disease and/or injury to your employees arising out of their employment with you.
Are there exemptions?
There are some special circumstances which exclude the need for an employer’s liability policy, such as:
– Most public organisations such as government departments, local authorities, police authorities etc.
– Health services such as NHS, primary care trusts and Scottish health boards
– Organisations financed by public finding
– Family-run businesses where all employees are closely related (excluding limited companies)
– Companies employing only an equal partner.
Unless one of the above applies to you, you will legally require employer’s liability under the Employer’s Liability Act.
How to recognise that you have employees
If you have workers under a contract service or apprenticeship, whether confirmed as such verbally, written or even implied you will be legally obliged to insure them as your employees with an employer’s liability policy.
You can identify employees as such if you:
– Deduct national insurance and income tax from what you pay them
– Supply them with equipment and materials
– Control when, how and where they work
– Profit from work they have carried out
– Deny them the ability to sub-contract
What happens if you don’t have employer’s liability
If you are legally obligated to have an employer’s liability and you fail to implement a policy, you could face a fine of up to £2,500 for every day that you have been without adequate cover for your employees.
If you fail to produce adequate proof of cover in the form of a certificate to a HSE inspector, you could be fined an additional £1,000.
Need a quote?
Click here to get an employer’s liability quote
Click here to get a public liability quote
Give us a call on 02920 846 569