What is employers’ liability insurance?

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This small guide to employers' liability makes selecting the right insurance simple. Find out more in our FAQ Hub.

Employers’ liability insurance protects your business against the cost of compensation claims made in the event of an employee injury or work-related illness. For most businesses in the UK, Employers’ Liability insurance is a legal requirement and not having adequate cover can lead to significant fines.

As an employer, you are responsible for the health and safety of your employees while they are at work. If an employee suffers an injury or falls ill, you may be held liable. It could be something as simple as an injury caused by slipping on a wet floor, or an employee contracting a disease because of something you were unaware of.

Employers’ liability insurance cannot prevent accidents from happening, but in the event that they do, it will cover the legal and compensation expenses arising from a claim.


Do I need employers’ liability insurance?

In most circumstances, having an employers’ liability policy is a legal requirement for businesses with employees, even if you only employ one other person or you have employee on a temporary contract. Failure to do so could incur a fine of up to £2,500 a day until you take out the correct cover.

There are some exceptions, such as public organisations and small businesses which only employ close family members (although this exemption does not apply to family businesses incorporated as limited companies).

Read more on who needs employers’ liability insurance


What does employers’ liability insurance cover?

Your business will be covered in the event of a claim from an employee about an injury or illness suffered as a direct result of their work. For instance, if an employee trips and falls over a trailing computer wire and damages their arm, you, the employer, are liable.

Employer liability will cover the cost of settling and defending the claim, including compensation pay-outs and legal fees should the case go to court due to a breach of a regulation or statute.

Read more on what employers’ liability can cover


How much does employers’ liability insurance cost?

How much your employers’ liability insurance costs will depend largely on the number of employees that you have. The nature of your business is also an important factor in calculating a quote, if there are more risks involved in carrying out your work, it’s likely that you will pay a higher premium.

The best way to get an idea of how much employers’ liability insurance will cost for your business is to get a free quote online.

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How much Employers’ Liability insurance do I need?

In Great Britain, as soon as you become an employer you’re required to have cover of at least £5 million. If you think you might need more cover, you will need to consider how much the most serious claim you might face could cost.

The legal and compensation costs of defending your business against an employers’ liability claim could significantly damage your business, so it’s important to have appropriate protection in place.There are some circumstances in which a company does not need employers’ liability insurance, but these are few and far between. To make sure you’re getting the right level of cover, speak to an insurance specialist about your business insurance requirements and have a quote tailored to you.

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