Employer's Liability Insurance

Required by law for almost all businesses with staff, employers’ liability insurance provides up to £10m of cover, including legal fees, damages, and compensation costs.

What is employers’ liability insurance?

Employers’ liability insurance protects your business should any staff suffer injury or illness while at work. When an employee claims against your company, employers’ liability insurance covers the costs of defending the claim in court. And if the claim is successful, your insurance also pays compensation costs agreed in the settlement.

Costs of defending and settling a claim could run up to millions of pounds. With employers’ liability insurance, you have peace of mind that your business is protected should the worst happen. It also reassures employees that their welfare is taken care of should they experience injury or illness while working for you.

What does employers’ liability insurance cover?

Should staff make a claim against your business, an employers’ liability insurance policy provides cover for:

• The claimant’s costs and expenses related to their claim.
• The legal costs involved in defending the claim.
• Compensation awarded in the event of a successful claim (up to the limit of indemnity on the policy).
• Directors of a business, where action is personally brought against them for which they are entitled to indemnity under their policy.

Employers’ liability insurance covers claims made by employees following injury or illness occurring at work. Incidents covered include (but are not limited to):

• Slips – e.g. following a spillage of liquid or oil on a shop floor.
• Trips – wherever a hazard occurs, such as a misplaced item of stock or a raised carpet tile.
• Falls – e.g. from a ladder or scaffold working at height or down a flight of stairs.
• Respiratory conditions caused by work activity – e.g. lung disease caused by cutting, drilling, or sanding in construction work; or mesothelioma caused by exposure to asbestos.
• Bodily injury caused by use of equipment – such as unguarded machinery causing loss of limbs; vibration white finger caused by vibrating tools; or hearing loss caused by noisy power tools.
• Lack of Health and Safety training or procedures – e.g., insufficient training to operate machinery or lack of safety precautions when storing items.

Many other instances could lead to a claim from an employee. That’s why policies are inclusive to ensure your insurance meets legal obligations.

Please bear in mind, though, that exclusions apply to specific businesses, such as nuclear risks, offshore work, and travelling in motor vehicles (separately covered under a motor insurance policy).

Who can claim on employers’ liability insurance?

Employers’ liability insurance covers claims made by the following employees:

• Full-time or part-time staff
• Temporary staff
• Apprentices
• Volunteers
• Work experience placements
• Trainees

Not all the people listed above receive pay for their work. However, they may still suffer injury or illness while working for you, entitling them to claim if they believe your business is responsible.

Claims can be made by existing and former employees. Employees can lodge a claim with the insurer who covered your business at the time the incident occurred. They can trace the insurer through ELTO (the Employers’ Liability Tracing Office), meaning they can still claim if you have moved to another insurer or if you cease trading.

Potential claims from any of these individuals reinforces how important it is to have continuous employers’ liability insurance cover in place.

How much does employers’ liability insurance cost?

You can purchase employers’ liability cover by itself, but most businesses opt to include public liability insurance as a package. This policy also protects your business against claims of injury or material damage from members of the public.

Packaged cover for employers’ liability and public liability insurance starts at £150+IPT (insurance premium tax) per annum*.

The cost of cover can depend on:

• The number of staff you employ.
• The type of business you conduct.
• Your Health and Safety risk management procedures.
• Your liability claims record.
• If you require additional levels of cover above £10m.

For a tailored quotation, please call us on 01625 365378.

Do I need employers’ liability insurance?

Employer’s liability insurance is a legal requirement for any business with one or more staff members. The legal requirement for most companies is £5m of cover, though we recommend at least £10m.

Businesses without sufficient cover could be fined £2,500 each day if they don’t have valid employers’ liability insurance. And if you don’t display your insurance certificate, you may also receive a £1,000 fine.

The financial implications of defending or paying out claim settlements mean businesses of all sizes need sufficient cover, whether it is legally required or not.