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Public Liability Insurance (PL) covers claims from third parties, clients and members of the public injured or whose property is damaged by your work. Employers' Liability Insurance (EL) covers claims from your own employees injured at work as a result of your negligence. EL is a legal requirement if you employ anyone. Most tradespeople with staff need both policies in place.
Public Liability Insurance and Employers' Liability Insurance are two covers that regularly get mentioned together - and with good reason. For any tradesperson who employs people, both are important. But they do completely different jobs, and understanding the distinction matters when you're making sure your business is properly protected.
The simplest way to separate them: Public Liability Insurance covers claims from people outside your business. Employers' Liability Insurance covers claims from the people who work for you.
Here's a full breakdown of how each policy works, who needs it, and how the two fit together.
What is Public Liability Insurance?
Public Liability Insurance protects you if a third party, such as a client, a member of the public, or anyone else who isn't employed by you, suffers an accidental injury or has their property accidentally damaged as a result of your work.
As a tradesperson, the scenarios are straightforward. A client trips over cables you've left across a doorway. A tool falls and damages a neighbouring property. A customer visiting your site is injured by materials stored in the wrong place. Public Liability Insurance covers compensation and legal costs arising from such incidents.
At Rhino, Public Liability Insurance costs from £62.50 a year and includes cover for accidental bodily injury to third parties, accidental damage to third-party property, legal defence costs associated with a claim, and Products Liability for injury or damage caused by products you've supplied.
What is Employers' Liability Insurance?
Employers' Liability Insurance covers you if one of your employees suffers an injury or illness in the course of their work and makes a claim against your business. The injured person here isn't a member of the public; it's someone on your payroll or someone working under your direction.
Say a labourer you've taken on falls from a ladder on your site because it was not properly secured, or a member of your team develops a back injury from repeatedly lifting heavy materials where you haven’t provided training. Should they make a claim against your business, Employers' Liability Insurance covers the compensation and legal costs involved.
At Rhino, Employers' Liability Insurance costs from £62.50 a year and covers bodily injury or sickness sustained by employees in the course of their employment, including defence costs.
What's the key difference?
The distinction comes down to who is making the claim:
Who can claim? | Clients, members of the public, third parties | Your employees and workers |
What's covered? | Injury to, or damage to property of, third parties | Injury or illness suffered by employees at work |
Legally required? | No (but often required by clients) | Yes, for any business with employees |
Cost at Rhino | From £62.50/year | From £62.50/year |
Which is legally required?
Employers' Liability Insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969. The moment you employ anyone in your business, whether they’re full-time, part-time, casual, or temporary (including work experience), you're legally required to hold it. The minimum level required by law is £5 million of cover, and failure to have it in place can result in a fine of up to £2,500 for every day you operate without it.
Public Liability Insurance, on the other hand, is not legally required. But it's required in practice by most commercial clients and main contractors, who insist on proof of cover before they'll let you onto site. Many trade associations also require it as a condition of membership.
Do sole traders need Employers' Liability Insurance?
If you're a genuine sole trader with no employees, you don't need Employers' Liability Insurance. The legal requirement only kicks in once you employ someone.
What counts as "employing" someone for this purpose can be broader than you might expect. Labour-only subcontractors who work exclusively for you, and who you direct and control, may be considered employees for insurance purposes. If you're in any doubt, it's worth getting proper advice on how your working arrangements are classified.
Do I need both as a tradesperson?
If you employ anyone in your business, yes. The two policies address separate risks that both exist simultaneously. A client injured on your site is a Public Liability matter. A worker injured on the same site is an Employers' Liability matter. One policy doesn't cover the other, and without them, your business could end up footing the bill.
Even if you're currently working alone, it's worth knowing that the moment this changes, whether you take on a full-time employee, bring in a casual labourer for a week, or hire an apprentice, Employers' Liability Insurance becomes a legal obligation straight away.
How do both policies work together?
In practice, Public Liability Insurance and Employers' Liability Insurance are designed to complement each other. Public Liability handles the claims from outside your business. Employers' Liability handles the claims from within it. Together, they give you comprehensive protection against the most common liability exposures a trade business faces.
Here at Rhino, both policies are available from the same place, making it straightforward to get both in place at once. Holding both costs from £125 a year combined.
If you carry tools in a vehicle, you may also want to look at Tools Insurance to protect your equipment against theft and damage. And for physical building or renovation work, Contractors All Risks Insurance protects the works in progress on site.
Check out our guides to dive a little deeper into Public Liability Insurance and Employers’ Liability Insurance.
Get Public Liability and Employers' Liability Insurance in place today. Both available from Rhino, with an instant quote that takes under 60 seconds.
Frequently Asked Questions
Public Liability Insurance covers claims from third parties, clients and members of the public who are injured or whose property is damaged by your work. Employers' Liability Insurance covers claims from your own employees against your business who become ill or are injured as a result of your business’s negligence. Employers' Liability is a legal requirement for any business with employees.
Yes. Employers' Liability Insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969. Any business that employs anyone in the UK full-time, part-time, casual, or temporary must hold a minimum of £5 million of cover. Failure to have it in place can result in a fine of up to £2,500 for every day you operate without it.
If you are a genuine sole trader with no employees, no full-time staff, no part-time help, no casual labourers, you do not need Employers' Liability Insurance. The legal requirement only applies once you employ someone. However, labour-only subcontractors who work exclusively under your direction may be considered employees for insurance purposes.
If you employ anyone in your business, yes. The two policies address separate risks that exist simultaneously. A client injured on your site is a Public Liability matter. An injury to a worker on the same site is an Employers' Liability matter. One policy does not cover the other. Holding both at Rhino costs from £125 a year combined.
