The employer’s liability insurance has a dual purpose: compensation for health injuries suffered by the employee, and exemption of the employer from payment obligations due to his liability. At the same time, many people misunderstand the actual role of the legal institution and attribute to it a function that it does not actually have. The research aims to present the rules and practices of employer’s liability insurance in Hungary and to place them in the system in comparison to the rules of employer’s liability for compensating occupational health injuries.