Business Liability Insurance
Business liability insurance is not a single policy. It is a family of seven separate covers, each answering a different question about who is complaining and about what — and most businesses need two or three of them rather than all seven. One of the seven is compulsory and you can be prosecuted for going without it. The other six are voluntary in law and very often compulsory in practice, because a contract, a tender, a landlord or a regulator insists. This page sorts them out and sends you to the right one.
The Short Answer
Commercial liability insurance is a family name, not a product name. What sits underneath it is a set of separately underwritten covers, and two questions sort them out.
Who is bringing the claim? A member of the public, an employee, someone who bought or used something you supplied, a client who took your advice, a shareholder, or a person whose data you held. The claimant identifies the cover more reliably than the incident does.
And is holding it a legal duty, a contract term, or a choice? Those three get confused constantly, and the difference decides what you should buy when a tender asks for something the law does not.
Answer both and the cover names itself. Most businesses end up holding public, employers’ and products liability inside one combined package, with the specialist covers bought alongside where the exposure is real.
The Router
Each of these is a page written for that cover on its own — what it answers, what it does not, and what an insurer asks before quoting. Two lines here, the detail there.
A visitor, customer or passer-by says your business injured them or damaged their property.
An employee or former employee claims their work caused injury or illness. Compulsory for most.
Something you made, imported, own-branded or supplied is said to have caused harm or damage.
A client says your advice, design or professional work cost them money or had to be redone.
Your systems or your data have been attacked, and other people’s information is caught up in it.
An individual director is personally accused of something in the way the company has been run.
The directors, the company and employment disputes with your own staff, packaged together.
Most people are not sure. Tell us what has happened or what worries you and we will place it.
Damage to goods while you are moving them is a different family. Carriers liability insurance and freight liability insurance answer loss of or damage to the load rather than a claim against you for injury, and they live on our goods in transit insurance page.
The Legal Position
Employers’ liability is the one you can be prosecuted for not having. The Employers’ Liability (Compulsory Insurance) Act 1969 and the 1998 Regulations underpin a requirement for most employers to hold at least £5 million of cover from an authorised insurer. GOV.UK states that a business can be fined up to £2,500 for each day it is not properly insured, and up to £1,000 for failing to make the certificate accessible or show it to an inspector. Northern Ireland runs a separate order with its own enforcement. The detail, the exemptions and what the certificate duties actually require are on our employers’ liability insurance page.
The other six are voluntary in law. Public liability is, in HSE’s own description, generally voluntary — with activity and licensing exceptions. Products liability is not generally compulsory as a universal business policy. Professional indemnity is mandatory for some regulated practices and contractual for most others. Cyber, directors and officers, and management liability carry no general requirement to buy at all.
What forces the purchase instead is usually a contract. A main contractor’s terms, a tender threshold, a lease, a lender, a licence or a professional body will often demand more than the law would, and will name a limit. Those requirements are real and enforceable — they are simply not a statutory duty, and knowing which one you are answering changes what you should buy.
A fine is not a claim. Criminal fines, the cost of complying with an enforcement notice, and insured compensation to someone who was harmed are three separate things. No liability policy should ever be described as covering the first two.
Start From the Claim
Almost nobody rings up asking for a named product. They describe what has just landed in the post. These are the four most common openings and where each goes.
If it is an employee, employers’ liability. If it is anyone else — a visitor, a customer, a contractor’s staff, a passer-by — public liability. The test is employment, not where it happened.
Products liability, whether you manufactured it, imported it, put your own name on it or only supplied it. Owning the factory is not the test, and not owning one is no defence.
Professional indemnity, where the complaint is about advice, design, specification or professional work. If the complaint is about a defective physical thing, it is products instead.
Cyber, for the attack itself and for the data caught up in it. If the argument then moves to how the board handled it, directors and officers is the second conversation.
Two covers responding to one event is normal, not a sign something has gone wrong. A slip in a shop is public liability; if the floor was cleaned by a contractor you engaged, their policy is in the argument too. A ransomware attack can be a cyber claim and a management liability claim at the same time. What matters is that every policy which might respond is notified in time, and that nothing is admitted and no solicitor appointed before the insurer has consented. Every section carries those conditions, breaching one causes more disputes than any limit does, and getting it right is a phone call rather than a form.
The Boundaries
Four boundaries account for most of the arguments in this family — each one a place where businesses assume they are covered and find out they are not.
Public liability answers injury and damage. It does not answer a claim that your advice or specification was wrong — that is professional indemnity, and no limit on the first will help.
A defect in a thing you supplied is products. A mistake in work you carried out on site is usually public liability or professional indemnity, and the wording decides which.
Employers’ liability covers injury and work-related illness. An unfair dismissal or discrimination claim is not an injury claim, and it belongs to management liability.
Directors and officers protects the individual who is accused. Management liability wraps that together with the company’s own exposure and claims brought by employees.
Sector labels cut across all of this rather than adding to it. Construction liability insurance, manufacturing liability insurance, engineering liability insurance and retail liability insurance are ways of describing which of these seven covers a particular trade needs, at what limits and with which exclusions. The trade changes the emphasis; it does not add an eighth policy.
Who You Would Deal With
No call centre, no quote engine, and no assumption that you already know which of the seven you are asking about.
David leads the business. Ian Cooke has thirty-four years in the industry, leads the internal team and owns compliance — on this family of covers, he is the person who will tell you when a contract is asking for something the law does not require. Kate Thompson looks after new clients and the onboarding that follows, alongside Donna Hall in the team that picks up first enquiries.
Colin Thompson is our Claims Manager, with over eighteen years in the role, and he is why the routing question matters. Deciding which of the seven covers you need is what a liability insurance broker is for; the decision gets tested years later, when a notification has to reach the right insurer inside the right deadline. Claims are handled in house, by the person you already know.
Liability Insurance Enquiry
Park is an independent liability insurance broker in Durham, arranging business liability insurance for companies across the North East and the rest of the UK. Six questions and an optional upload. You do not need to know which cover you want — describing the problem is enough, and the two answers that decide the most are what you do and what you already hold. Send the current schedule if you have one: a liability insurance quote is only as good as the information behind it, and turnover, headcount, territories and signed contracts all change the answer. One working day, no fee, no obligation.
Common Questions
It is a family of seven separate covers rather than a policy, and each one answers a different claimant: the public, your own employees, the users of something you supplied, a client who relied on your advice, a director accused personally, and so on. Which of the seven you need depends on who could realistically bring a claim against you, not on the size of the business. The router above sorts them in one line each.
One. Employers’ liability is compulsory for most employers, at a minimum of £5 million from an authorised insurer, and GOV.UK states a business can be fined up to £2,500 for each day it is not properly insured. Northern Ireland runs its own regime. Everything else in the family is voluntary in law — which is very different from optional, because contracts, tenders, leases, lenders and professional bodies demand it constantly.
Partly. Public, employers’ and products liability normally sit together inside one combined commercial policy, which is why a single certificate can cover three of the seven. Professional indemnity, cyber, directors and officers, and management liability are separate contracts with their own limits, their own conditions and often their own renewal dates, even when one broker arranges all of them. They also work on a different trigger: public and employers’ liability usually respond to when the injury happened, while professional indemnity and cyber respond to when the claim is made against you — which can be a different year and a different policy. One document does not mean one cover.
There is no statutory scale beyond the employers’ liability minimum. The figures the market uses — £1 million, £2 million, £5 million, £10 million — are conventions and contract thresholds, not evidence that a limit is adequate. What decides it is the realistic worst case for the work you do, what your contracts require, whether the limit applies to each claim or to the year in total, and whether defence costs sit inside it. A limit chosen to match a tender is chosen to pass the tender, not to pay the claim.
Employers’ liability has an exemption for companies employing only an owner who holds at least half the issued share capital; HSE’s guidance is where to check whether it applies to you. The rest of the family does not care how many people you employ — a sole director visiting a client’s site still needs public liability, and products liability too if they sell anything. Contracts ask for both whatever your headcount is.
No, and any wording that suggests otherwise is worth a second look. Criminal fines, imprisonment, disqualification and the cost of doing what an enforcement notice tells you to do are all separate from insured compensation. Some policies fund the legal costs of defending an investigation — useful, and not the same as paying the penalty at the end of it.
Yes. Send the schedules and we will tell you which of the seven you are actually holding, where two overlap, where there is a gap, and whether any limit is doing less than it looks. If it is correctly arranged we will say so, and there is no fee either way.
