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Employers’ Liability Insurance

Why do you need Employers’ Liability Insurance?

Employers’ Liability Insurance is compulsory by law for most businesses. As an employer, you are responsible for the health and safety of your employees while they are at work. If an employee suffers and injury or an illness that they believe is your fault, they may try to claim compensation from you.
Note that an ‘employee’ is not necessarily someone who is paid by you – this can be anyone under a contract of service including volunteers or any person under your temporary control, whether on a contract or not.

If you are a limited company, you will be required by law to hold EL cover unless the company employs only its owner, with that owner also holding over 50% of the issued share capital.

  • Workplace injuries
    Accidents happen. In 2015-16 over 620,000 workers sustained a non-fatal injury and 144 workers were killed as a result of a workplace accident.
  • Employee claims
    Employers’ Liability Insurance provides cover for claims made by past or present employees, volunteers, and the like. It protects your business by paying legal defence and compensation costs.
  • Health and Safety inspections
    Inspectors may check you have the appropriate cover. If you are unable to provide your certificate of insurance along with other insurance details, you may be fined.

How we can help

Whether arranged as part of a commercial combined insurance solution or in isolation, we have experience in arranging this cover for companies from many industries and of different sizes. We can advise you on the level of cover you may need within the appropriate insurance package for you.

Product Benefits and Features

Employers’ Liability Insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you. Employees injured because of your negligence can seek compensation even if your business goes into liquidation or receivership. Although many accusations are unjustified, defending against legal actions is costly and time-consuming and it can also damage your reputation.

You need Employers’ Liability Insurance for all types of staff that work for you:

  • full-time employees
  • part-time employees
  • directors
  • voluntary workers
  • seasonal staff
  • contract staff
  • labour only sub-contractors
  • students or work placements

When do you need cover?

You require employers’ liability cover from the day your business starts employing staff. To qualify as "staff" a person does not have to be paid or under contract to you. It includes any person to whom you have a legal duty of care. This means that sometimes even sole traders will need employers’ liability insurance.

Frequently asked questions

Q
Do I need Employers’ Liability Insurance?
A
Yes. Under the Employers’ Liability (Compulsory Insurance) Act, all organisations that have staff are required by law to have EL Insurance.

Q
Are there any exceptions to the type of employees I need to cover?
A
You may not need cover if you only employ a family member or someone who is based abroad – see http://www.hse.gov.uk/pubns/hse39.pdf for information. If you are a limited company most exceptions will not apply to you.
Q
What is the minimum cover I need to have in place?
A
You are legally required to have cover for compensation of at least £5 million, but most policies will offer cover for £10 million. The cost of your premium is usually based on a number of factors including: the nature of your business; the number of people you employ (and/or the payroll cost); your previous insurance claims. In the case of larger organisations or where a number of employees are in one location, increased limits are recommended.
Q
When do I need to get EL cover?
A
From the moment you have any person to whom you are responsible, whether paid or not, you are at risk of legal action.