Find the best employers liability insurance for your business

Employers’ liability insurance covers any sum you may be legally liable to pay employees in the event of injury, illness or death caused during their employment. If you employ anyone in the UK, purchasing employers' liability insurance is a legal requirement.

How does an employer’s liability insurance work?

As an employer, you are responsible for protecting your employees; unfortunately, accidents can still happen even with all the necessary precautions in place. This is where employers’ liability insurance becomes useful.

Employers’ liability insurance will cover any costs associated with legal action taken against your business by a current or former employee if they’ve been injured or become ill whilst working for you.

You can buy employers' liability insurance as a standalone policy, but it's also commonly included in packaged business insurance or can be added to a commercial combined policy for bigger businesses.

Most employers' liability insurance policies cover all employees without knowing their exact job roles or how much they are paid. The standard coverage limit for this type of insurance is £10 million, although the law requires most businesses to have a minimum coverage of £5 million.

What does employers’ liability insurance cover?

Employers’ liability insurance is designed to protect your business if past or present employees take legal action for injuries or illnesses they’ve suffered in your employment. The costs covered by employers’ liability insurance are typically:

• The legal costs associated with the legal action bought forward by employees
• Any compensation you need to pay an employee if deemed necessary (including covering the medical bills and loss of income incurred by the employees relating to the claim).

An employee is defined as someone:

• Who has National Insurance contributions and income tax deducted from their salary
• Whose location, hours and conditions of their work are controlled by their employer
• Who cannot be replaced by their employer if they are unable to work

An employer’s liability policy should cover claims brought by:

• All permanent employees
• Contract, casual and seasonal employees
• Labour-only subcontractors
• Temporary staff (including students, people on work placements, volunteers, advisers, referees and marshals)

How much does employers’ liability insurance cost?

Several businesses will get employers’ liability insurance included as part of a packaged or combined business insurance policy, though cover can also be bought individually.

The cost of employers’ liability insurance for your business will usually depend on the following:

• How many employees you have - businesses with a large number of employees are at greater risk of having a claim made against them.
• Your industry - some industries, like construction, are deemed to be at higher risk than others because an accident or injury is more likely to occur than in other sectors.
• The level of cover your need - whilst most low-risk small businesses might only need the legal £5 million minimum amount of cover, high-risk companies or large corporations may require a significantly higher limit of liability.

Do I need employers' liability?

Almost every UK business is legally required to have employers’ liability insurance in place. Though there are a handful of exceptions, such as:

• All of your employees are based abroad - Under UK law, employers’ liability insurance is not required to cover any employees who are based abroad.
• You don’t have any employees - if you don’t have any employees, you don’t need employers’ liability.
• You’re an unincorporated family business - As long as your business isn’t incorporated as a limited company and you only employ direct family members, you’re not required to have employers’ liability.
• Specific types of business - public organisations and health service bodies are not legally required to have employers’ liability insurance.