In a standard commercial insurance policy, you may have one or all three of the “standard” liabilities, employers, products and public liability insurance. If you have a claim made against your business, for example if a product you supply causes an injury, then you will usually have a valid claim under the products liability.
For products liability, you will have an overall limit of indemnity, usually £2,000,000, and this will cover claims totalling this amount in any one period of insurance. ie you can have four claims at £500,000 but not five, as this will exceed the limit. The cost of defending an action against you is also covered which is vitally important. These additional legal costs are paid in addition to the limit of indemnity. The main reasoning is that insurers want to be able to control the claim from the outset to ensure that only valid claims are settled.
The other two liability covers, public and employers liability, tend to have a limit of indemnity any one claim. So, under you public liability it can be five claims at £2,000,000 and for employers liability the minimum legal limit of indemnity os £5,000,000 so the potential cost could be huge.
These three liabilities are usually called the combined liability insurance if bought as a separate policy.