Employers Liability Insurance

What is employers’ liability insurance?

There are many different types of insurance policies you can take out as an employer and employers’ liability insurance is just one type of policy you need when you employ people.

Unlike other types of insurance that aren’t always legally required to have as an employer, employers’ liability insurance is in fact a legal requirement if you employ people.

This type of insurance is designed to protect you as an employer in the event that an employee or former employee decides to make a claim against you as a result of them becoming ill or injuring themselves while working for you. It helps to cover compensation costs if a claim is made against you.

What does employers’ liability insurance cover?

Employers’ liability insurance offers you cover for numerous different costs and legal fees that could arise when someone makes a claim against you.

It will cover the cost of any compensation claims made against you by a current or former employee who claims that they’ve suffered from an injury or illness as a result of working for your business.

If the employee decides to take you to court, employers’ liability insurance will cover the cost of any associated legal fees and will usually cover the cost of any compensation you’re required to pay to the employee.

Is it a legal requirement to have employers’ liability insurance?

While many other types of insurance for businesses are recommended, they’re not always a legal requirement.

However, according to the Employers' Liability (Compulsory Insurance) Act 1969, employers’ liability insurance is one type of policy that is required by law if you employ at least one person who is not directly related to you.

You will more than likely need to have employers’ liability insurance if one or more of the following applies to your business:

• If you deduct National Insurance and income tax from your employees’ salaries.
• If you supply work equipment and materials to your staff for work purposes.
• If you determine when, how and where your employees work (such as a building site, office etc).
• If you are entitled to any profits that arise as a result of your employees’ work.

You won’t usually need employers’ liability insurance if you don’t employ anyone else but yourself or if you only employ direct family members or if all your employees are based abroad and don’t work in the UK.

What might you claim for with employment liabilities insurance?

While each and every business will differ in terms of the level of cover they want to take out for employers’ liability insurance, which means the things you’re covered for will differ slightly, it’s a good idea to be aware of some of the examples of employers’ liability insurance claims so you know what you can and can’t claim for.

• You will be able to make a claim if your business operates from an office and one of your workers injures themselves by tripping on a hazardous or slippery surface.
• A claim can be made if one of your builders suffers from an injury as a result of faulty or damaged equipment that you provided them with to carry out their work.
• You can claim on your policy if one of your workers develops an illness as a result of the working conditions you’ve provided (e.g. they become ill as a result of your office building having asbestos).

It is also usually possible to make a claim on your employers’ liability insurance policy if one of your ex-employees makes a claim against you saying that they suffered an injury or illness while they were working for you.

What is the difference between public and employers’ liability insurance?

While both these types of policies work in very similar ways, they differ with regard to who is making a claim against you.

Public liability insurance is needed when a claim is made against your business by a member of the public or someone who isn’t involved with your business, whereas employers’ liability insurance is required when an employee or former employee makes a claim against you and your company.

How much EL insurance cover do I need?

The amount of employers’ liability insurance, sometimes referred to as just ‘EL insurance’, that you need depends on numerous factors including the size of your business and how many employees you have, as well as the type of business you run (partnership, freelancer, limited company, etc) and also how risky your line of business is deemed to be.

As a legal requirement, you’re expected to have cover for at least £5 million, but the industry standard is usually around £10 million. The riskier your business is deemed to be, however, means that you’ll likely need more cover, which in turn means you’ll end up paying more for your policy.

How much does employers’ liability insurance cost?

The cost of your employers’ liability insurance policy will depend on the level of cover you need, so get in touch today and we’ll compare quotes from our panel of trusted providers to let you know how much you can expect to pay for your policy.