Insurance for your business

Employers’ liability insurance for your business

Employers’ liability insurance is a legal requirement for any business which has one or more employees. Incorporating it into a single business policy along with your public liability and any additional covers can reduce the overall cost and make your business insurance easier to manage.

View HSE regulations on Employers' liability

What does employers’ liability insurance cover?

If you have employees there is a chance that they may be injured at work or become ill as a result of working for you. If this happens they might be entitled to claim compensation from you and you need employers’ liability to cover the cost.

An example of a situation where you would need to claim on your employers’ liability cover would be if an employee is injured while working on machinery without the proper safety precautions.

It also covers claims for employee illnesses that have been contracted as a result of working for you, even if they manifest after the person has left your employment. For this reason you must keep on file all documentation related to your employers’ liability insurance, even if it has expired.

An example of a claim

A self-employed contractor was working exclusively for the insured business. While at work he jammed his hand in between a lintel and a metal bar, causing a serious laceration.

What did the insurer cover?
The insurer paid out damages to the contractor under the employers liability cover at a cost of £49,990.

What level of employers’ liability cover do you need?

Employers’ liability claims can be very expensive and as such the standard level of cover given as part of business insurance policies is £10 million.

Details to look out for

• If you do not take out employers’ liability when you employ staff you could be asked to pay a £2,500 fine for each day you do not have it.
• Be careful to put down the correct number of clerical and manual staff if you employ both types.
• Immediate members of your family who work for you do not count as employees for employers’ liability insurance, however casual workers, part-time workers and temporary staff do count.

Health and safety and risk assessments

If you adhere to the relevant health and safety regulations for your industry and carry out regular risk assessments, you can reduce the likelihood of employee accidents and illnesses and will be less likely to need to make a claim.

For more information on health and safety regulations for your industry, see our Legal Matters knowledge section.