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Why you may need both Public and Employers' Liability Insurance

Rhino Trade Insurance 26 April 2023

Here at Rhino, we know that managing your own company can be challenging, particularly if you have workers or subcontractors on board. Dealing with more employees can make running your company more difficult, from payslips to HR (and that's before deciding who will make the tea and coffee).

The problem with running a trade business is that there are so many issues that can throw a spanner in the works. As the boss, you need peace of mind that you, your company, and your workers are safeguarded if something were to go wrong at work, whether it be an accident, theft, or any type of legal dispute. That's where Rhino Trade Insurance comes in to help your company better understand its policies and what safety commitments it should have whilst also helping you bust that complex insurance jargon.

We provide several popular insurance options for trade businesses, but today we’ll focus on two of our best-selling policies – Public Liability and Employers Liability Insurance. It’s important that every tradesperson knows what they cover, so we've broken it down for you below.

Public Liability in a nutshell

Public Liability Insurance protects you and the company you own in the event that an accident involving a member of the public (a client, a visitor, etc.) results in an injury or fatality. It also covers lawsuits brought about by unintentional damage to the property of others.

For self-employed tradespeople, this insurance is regarded as "business critical" and includes legal fees related to any claim and/or damages owed by your company (up to your chosen level of cover). Essentially, Public Liability Insurance will pay the cost of the ensuing claim if you injure someone or damage their home by accident.

Employers' Liability in a nutshell

Employers' Liability Insurance provides protection for your business against litigation and compensation costs resulting from an employee claiming against your firm.

As an employer, you must fulfil the duty of care to your staff members and ensure the health and safety of anyone you employ on-site. A claim could result from something as simple as slipping on a wet floor, to more complex industrial accidents, injuries or illnesses. Employers' Liability Insurance can safeguard your company's viability because mishaps occur regularly in the trade industry, and you’re likely to have to settle more than one claim during your time in business.

Read more about Employers’ Liability here.

What are the differences?

Are Employers' Liability Insurance and Public Liability Insurance the same thing?

No. Although they’re frequently confused, they’re different policies which cover different things. An easy way to sort out which is which is to ask – who is the claimant? The source of the legal action against you or your company determines whether it is covered by Public Liability Insurance or Employers' Liability Insurance.

If a member of your staff makes the claim, Employers' Liability Insurance should provide protection. This type of insurance is intended to defend your company if an employee has experienced a work-related illness or accident. This is because you’re in charge of your workers' health and safety while they are at work. You might be responsible, for instance, if an employee injures themselves on a power tool. In such a case, Employers' Liability Insurance would pay for any compensation payments and the expense of a legal defence.

If it’s a third party claiming against your business, Public Liability Insurance should provide coverage. This type of insurance will help you defend your company if a customer or a member of the public declares that your company's operations have caused accidental injury or damage to property. If, for instance, you spill paint on a client's flooring or a customer slips in water from a leak in your shop and suffers an injury, Public Liability Insurance should pay for court fees and damages owed.

Does your trade business need both insurance types?

Employers' Liability Insurance is a legal requirement, whereas Public Liability Insurance is not. However, it is highly recommended to have both.

Legislation in the UK mandates that any business that employs any individual, including temporary employees, independent contractors, unpaid volunteers, students, and trainees, must obtain Employers' Liability Insurance with a minimum of £5 million in coverage. There are some exceptions, such as when you are your limited company's only employee and own over 50% of the shares or when your workers are your immediate family members. Even so, it might be necessary for some customer contracts in these situations. Significant penalties of up to £2,500 per day may be imposed for failing to have this protection.

Public Liability Insurance is not legally required, but you should absolutely have it if you interact with clients or the public in your line of work. Plenty of client contracts stipulate having Public Liability Insurance as a mandatory part of the contract, so you’ll risk putting lucrative clients off if you’re not covered.

Even if you work from home, inviting clients to your home workplace or promoting your company at trade shows puts you at financial risk as it’s possible something could happen at these location. After all, it’s better to be safe than sorry.

Find out why Public Liability is valuable to your business here.

How much do these insurance options cost?

Both Employers Liability and Public Liability Insurance can typically be purchased individually or as part of an insurance package. The price will be determined by a range of things, including:

  • Size and scope of your trade business
  • The sector you operate in and the location
  • Your company's revenue
  • Your claims history and level of coverage required

Certain contracts will require you to hold a specific level of protection, and as stated, if you have employees, you legally must hold certain types of insurance. At Rhino, we offer Public Liability cover from £1 million to £5 million, and our Employers' Liability can be taken out up to £10 million.

Why choose Rhino Trade Insurance?

Insurance can get confusing, and if you are still unsure whether your company requires Public and Employers' Liability Insurance, just give us a call. Thanks to our lovely team of qualified insurance consultants, you can get your questions answered.

Our staff have years of experience in the insurance sector, and many of us have been at Rhino since day one.

If you're interested in learning more about Public or Employers' Liability Insurance or how trade insurance can benefit your company. If you would like a price for your next policy, get in touch with the staff at Rhino Trade Insurance by calling 0116 243 7904 or filling out our contact form to get more information and an instant quote. We look forward to chatting with you!

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