Knowledge Centre

Employers’ Liability Insurance at a glance

If someone working for you becomes ill or injured as a result of their work activities you may face a claim. Depending on the seriousness of the injury, the cost of claims related to employer health and safety responsibilities can be very high. That’s why it is vital for every employer to consider Employers’ Liability Insurance.

Who needs Employers’ Liability Insurance?

If one or more other people are helping your business to function (even if you are not paying them a wage) then you have a responsibility for their health and safety whilst at work. A written contract of employment does not need to be in place as anyone working for your business is still deemed to be an employee. This includes part-time workers, students on work experience, sub-contractors and volunteers.

In these instances (with the exception of some family businesses), you are an employer in the eyes of the law and therefore you need to take out Employers’ Liability Insurance.

What does Employers’ Liability Insurance protect against?

Employers’ Liability Insurance protects your business from claims for compensation from employees. An employee may claim against you if they are hurt or injured whilst working for you. Former employees can also claim against you if they believe they have become ill as a result of working for you.

Is Employers’ Liability Insurance compulsory?

In most cases, if you have one or more employee, it is; however there are some exceptions as shown below. You should check with one of our business insurance specialists to see if these apply to you:

You may be exempt from having Employers Liability insurance in the following instances:

• All of your business' employees are close relatives and the business itself is not incorporated as a limited company.
• The owner is the sole employee, and owns at least 50% of the company's issued share capital.

How much Employers’ Liability cover will I need?

The minimum legal level of Employers’ Liability Insurance required by a business is £5 million however, depending on the individual business risks and liabilities, more may be required. If you don’t have adequate cover in place, you risk a substantial fine.

What’s covered?

• Third party property damage
• Personal injury
• Legal or medical fees may also be covered