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Employers & Public Liability Insurance

Public liability insurance, Employers liability insurance

Public liability insurance provides protection for your business in the event of a claim being brought against you for damage caused to other people’s property or for injury to a member of the public caused by your negligence.

Do you need public liability insurance?

public liabitlity insurancePublic liability insurance is not a legal requirement in the UK but it is advisable to arrange cover. Unfortunately it is a fact that today’s society has become very litigious, everybody appears to be looking for somebody to claim compensation from!

What does public liability insurance cover?

If you arrange your public liability through Hensure Business Solutions we will carry out a full review of your activities and make sure that you are covered on the right basis. The price charged by an insurer will depend on the size of your business and the activities that you carry out. Most insurers will adjust the premium depending on your claims record and the positive features that you can demonstrate when you propose the risk to them, such as a positive attitude to risk management and health and safety.

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Your insurance policy will indemnify you against all sums for which you shall become legally liable to pay as damages and claimants costs and expenses arising out of accidental injury:

  • to any person.
  • physical loss of or physical damage to material property.
  • obstruction, trespass, nuisance, wrongful arrest or interference with any       right of way, light, air or water occurring within the territorial limits and resulting directly from the trade or business during the period of insurance.

Employer’s liability insurance

If you own a business that has employees, it is likely that employers' liability insurance will be compulsory. Employers' liability (EL) insurance enables businesses to meet the costs of damages and legal fees for employees who are injured or made ill at work through the fault of the employer. By law, an employer must have employer’s liability insurance and be insured for at least £5 million. Most insurers automatically provide cover of at least £10 million.

Generally, someone is defined as an employee if:

  • they are under a contract of service
  • you deduct National Insurance contributions and income tax from the salary you pay them
  • you control when, where and how they work
  • they cannot employ a substitute when they are unable to work

If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory employer’s liability insurance. Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company, are also exempt from compulsory EL insurance.


Key Points

  • Employers liability cover usually compulsory if you have employees.

  • Public liability cover not compulsory but advisable in today's litigious society.

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