Difference Between Public Liability Insurance and Employers Liability Insurance

In the world of business insurance public and employers liability insurance are two essential policies designed to protect your business. While they both cover claims related to injury or property damage, they differ primarily in terms of who can make the claim and the types of scenarios they cover.

Continue reading to learn the difference between public liability insurance and employers liability insurance and see why they both might be necessary for your business.

What is Public Liability Insurance?

Public liability insurance provides coverage for claims made against your business by third parties—such as clients, customers, contractors, or passersby. It can be due to injuries or property damage caused by your business activities.

This insurance helps cover the cost of legal fees, compensation, and damages if someone outside your business is harmed as a result of your operations.

Is It Legally Required?

This policy is legally required for businesses that interact with the public regularly. This includes industries such as retail stores, restaurants, and service providers. Additionally, some clients may require proof of public liability insurance before entering into contracts.

What is Employers Liability Insurance?

Employers liability insurance covers claims made by employees who have suffered work-related injuries or illnesses that are not covered by workers' compensation.

This type of insurance helps protect businesses from the financial consequences of such claims, including legal fees and compensation costs. It ensures that the employer's business is financially protected against potential lawsuits from workers seeking compensation.

Is It Legally Required?

Yes, employers' liability insurance is mandatory for most businesses in the UAE and other countries. It is required by law to protect employees in case they suffer injuries or illnesses while on the job. However, not all companies (like companies with no employees or a family business with family members only) are required to buy this policy.

What’s the Difference Between Public Liability Insurance and Employers Liability Insurance?

To make a better judgement about which insurance you should purchase, consider the following key points that can help you make a better decision —

Feature	Public Liability Insurance	Employers' Liability Insurance
Who makes the claim?	Claims from members of the public (clients, customers, contractors, etc.)	Claims from employees or former employees
What does it cover?	Injury or property damage caused to third parties	Injury or illness sustained by employees due to work
Is it legally required?	Yes, often recommended or required by clients	Yes, it is a legal requirement in most countries for businesses with employees
Coverage areas	Public or customer injuries, damage to third-party property, legal costs	Work-related injuries, illnesses, stress, legal costs
Who needs it?	Any business that interacts with the public or third parties	Any business that employs workers, including part-time, full-time, temporary, or on contract basis

How Much Coverage Do You Need?

The amount of coverage you need for public and employers liability insurance depends on various factors, including the -

Size of your business
Business type
Level of risk your operations pose
Number of employees

Which is Better? Employers Liability Insurance vs Public Liability

By having both types of insurance, you can safeguard your business from a wide range of legal and financial risks.

To fulfil your legal obligations, employers liability insurance is required or to protect your business from significant financial losses public liability insurance is required.

If your business needs both public liability and employers' liability insurance, you can buy both covers at the same time under one policy.

Key Takeaway

It’s crucial to always assess your business needs carefully and ensure you have adequate coverage to protect your employees, clients, and your business as a whole.