Employers' Liability Insurance

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Employers’ liability insurance for small businesses

No matter what kind of business you run, if you’ve got employees you may need employers' liability insurance. This helps to protect your business against the cost of compensation claims due to an employee illness or injury while carrying out work for your business.

Employers’ liability insurance can protect your business from compensation claims and legal costs if an employee claims compensation or sues after an injury or illness at work. Additionally, employers’ liability insurance is a legal requirement for most businesses in the UK under the Employers' Liability Act 1969.

Most businesses must have a certificate of employers' liability insurance in place as soon as they employ their first staff member. This applies to most workers, including part-time or temporary workers, and some contractors.

How much employers' liability cover you need will ultimately depend on the size and type of your business, and how many workers you employ. However, most employers will need at least £5 million pounds, and most insurers will provide £10 million as standard for small businesses. Even sole traders, family businesses and small companies might need to consider employer liability insurance to protect paid staff, trainees and volunteers.

Employers' liability insurance will help to safeguard your business against unforeseen incidents that can occur in your workplace. Some examples of how potential claims may arise include:

  • An office worker suffers from repetitive strain injury caused by excessive computer use at work.
  • A cleaner injures her arm after falling over a mop.
  • A builder hurts his back lifting bricks on a construction site.
  • Tripping hazards, and more.

Employers' liability cover is designed to protect your employees in case they become ill or injured as a result of working for you. It can also cover incidents that happen when traveling between work sites within the UK and those who make claims after leaving your employment.

What Does Employers' Liability Insurance Cover?


Compensation and legal costs

An employee claim against your company could be substantial. With legal fees, the financial impact could be very high.


Various types of employees

Most workers, whether employed directly, contracted from an agency or in a traineeship, are covered in case of an incident as a result of working for you. Some types of contractors, known as bona-fide subcontractors, will have their own public liability insurance, but labour-only contractors will need to be covered by your business’s public liability and employers’ liability insurance.


Legal compliance

Legally, most UK businesses must have this insurance for their workers. Non-compliance can lead to fines of up to £2,500 per day.

Frequently Asked Questions about Employers' Liability Insurance

Why do I need employers' liability insurance?

If you are a business based in the UK and you have one or more people working for you then you may need employers’ liability insurance. For most businesses it is a legal requirement under the Employers' Liability Act 1969 and not having this cover can cost you up to £2,500 per day in fines.

Some businesses may be exempt from requiring cover such as public organisations, health bodies, sole traders and family-only businesses. Even so, employers' liability cover is still worth considering to protect you from claims that may come up. Accidents can happen in any work setting and having employers' liability insurance will help to prevent you being caught out of pocket should claims occur.

What is covered by employers' liability insurance?

Having employers' liability insurance can help to cover the cost of legal or compensation claims brought against your business by current or former employees for a work-related illness or injury. It can help to cover costs of compensation claims for injury or illness incurred by an employee that they believe has been caused by their work. This usually includes work done on site, at home, or anywhere where the employee is required to carry out work for your business.

Employers' liability insurance can help to cover legal and compensation expenses from claims of illness or injury relating to work tasks performed by employees. In addition, it covers various types of employees who works for your company including paid staff, contractors, and trainees.

How much is employers' liability insurance in the UK?

How much you would expect to pay for employers' liability cover depends on a number of factors. Businesses require cover of at least £5 million as soon as they employ their first member of staff, and the standard amount of cover we’ll arrange for your business is £10 million. The more people you employ, the more you will need to cover. You will also need to take into consideration the type of work your business is involved in.

Businesses that engage in high-risk work such as construction and engineering generally have higher premiums. The best way to get an idea of how much cover you need is to speak to professionals such as our expert team of advisors at Aon, who can arrange a quote that meets the needs of your business.

Aon can arrange employers’ liability insurance as part of a business insurance package, alongside other cover such as public liability.

Is employers' liability insurance the same as public liability insurance?

Having a certificate of employers' liability insurance and a public and products liability insurance policy is worth considering, however both serve different functions.

Public and products liability insurance helps protect your business from claims made by third parties, such as the general public. This can include customers who may have suffered damage or injury from a product you sold them, or someone who has had an accident in or outside your premises as a result of your business activities.

Employers' liability insurance, on the other hand, protects your business from claims made by any current or former employees for illness or injury caused by their work. In addition, public liability insurance is not legally required, although it is worth considering, while employers' liability insurance is legally required for most UK businesses employing staff.

Do businesses need to display their employers' liability certificate?

In order to prove that your business is complying with legal requirements, you must display your certificate of employers' liability insurance. This certificate is a legal document issued by your insurer that details your policy and the level of cover it gives.

In order to comply with your legal requirements, you need to display it somewhere prominent in your workplace so any staff member can see it. This can include hallways and staff rooms, or anywhere where it will be clearly visible.

Alternatively, you can display a digital version on your company's online network, so long as it is up to date and all employees can access it. Failure or refusal to display your certificate of employers' liability insurance can result in you getting a £1,000 fine.

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