Employers’ liability insurance explained
Employers’ liability insurance covers the cost of defending or settling an employee’s claim that they have suffered bodily injury or disease as a result of the work they do for you. It also covers the cost of defending a related criminal prosecution if the accident or disease came about because a law or regulation had been broken.
As a small business with employees, your people are one of your greatest assets and investments. They’re also a great responsibility. Not only do they rely on the success of your business to provide their livelihood, but as an employer you have an obligation to provide safe conditions for them to work in. It goes without question that you do your best to limit the possibility of injury or disease to your employees resulting from the work they do for you. But what if they have an accident or become ill as a result of something you weren’t aware of? Your employee could sue your business for compensation. And if the incident exposes a breach of legislation or regulation, your business could also face legal prosecution.
Who needs employers’ liability insurance?
In order to safeguard all employees in the UK, it’s a legal requirement* for most businesses with employees to have at least £5 million of cover in place. If you’re self-employed, liability insurance will also, in most cases, be a legal requirement if you employ one or more people.
Our employers’ liability insurance is only available alongside Hiscox public liability insurance.
Why is it a good idea to be covered?
- For most business with employees, it’s a legal requirement to have at least £5 million of cover in place – failure to do so could lead to significant fines
- Easy access to ‘no win no fee’ legal services which help employees claim compensation if they’ve suffered an accident or disease may increase the likelihood of a business experiencing an employers’ liability claim
- Your employers’ liability could be triggered even if the employee is a voluntary helper or is self- employed but working under your supervision
- The legal and compensation costs of defending your business against an employers’ liability claim could significantly damage your business.
How much is employers’ liability insurance?
When it comes to employers’ liability insurance, cost will vary from person to person depending on things like the nature of their business and the amount of people they employ. The best way to get an idea of how much you would pay is to get a quote, which will be tailored to your specific needs based on a series of questions about your business.
How Hiscox employers’ liability insurance protects you and your business
- Pays your legal and compensation costs if you are sued by a member of your staff if they believe their work has caused them injury or made them ill
- Covers any person working for you in connection with your business even if they are voluntary help or self employed
- Claims for injuries or disease caused by terrorism are also covered up to a limit of £5 million
- It can be added to your public liability insurance, which covers compensation you have to pay a client or member of the public due to accidental injury or property damage.
When do I need employers’ liability insurance?
You may need to use your employers’ liability insurance if an employee brings a claim for compensation against you. Here are a couple of quick examples:
- An employee claims to have slipped over and injured themselves on a wet floor at work, which has left them unable to work for a period of time. They bring a claim for compensation against your business for the money they have lost due to this.
- An employee claims to be suffering from stress due to the work they’re doing for your business, which has left them unable to work for a period of time. They bring a claim for compensation against your business for the money they have lost due to this.
Hiscox employers’ liability insurance can ensure your business meets unforeseen legal and compensation costs. The employers’ liability policy is only available to purchase alongside our public liability insurance, which covers claims made against your business from members of the public.
As a Hiscox employers’ liability policyholder, we will ask you to supply some additional information about your business, including your Employer Reference Number (ERN) so it can be recorded on the Employers’ Liability Tracing Office (ELTO) database. Find out more about ELTO >
We want you to understand the employers’ liability cover we offer.
Download employers’ liability insurance summary of cover (PDF)
Download employers’ liability insurance policy wording (PDF)
* The law states most employers must have employers' liability insurance. However, you may not need it if you have no employees or are a family business and closely related to your staff – Health and Safety Executive