Employers Liability Insurance

What is Employers Liability Insurance?

Employer’s liability insurance covers the cost of compensating employees who are injured at or become ill through work. Employer’s liability insurance usually covers the cost of compensation and any associated legal fees.

Do I need Employers Liability Insurance?

As an employer, you are responsible for the health and safety of your employees while they are at work. If an employee suffers an injury or falls ill as a result of working for your business, you could be held liable. Following the introduction of the Employer’s Liability (Compulsory Insurance) Act 1969 You must arrange Employer’s Liability (EL) insurance as soon as you become an employer - your policy must cover you for at least £5 million and come from an authorised insurer.

You can be fined up to £2,500 for every day you do not have appropriate insurance.

You can also be fined £1,000 if you do not display your EL certificate or refuse to make it available to inspectors when they ask.

What businesses are exempt?

Some businesses are not required to have employer’s liability insurance, including:

Companies with no employees
Family businesses that employ only family members

To check if your business is exempt from employer’s liability insurance see the Health and Safety Executive (HSE) website.

What’s included in Employers Liability Insurance?

Legal costs and compensation for illness and injury claims, and defending health and safety law prosecutions; our policy provides £10 million cover as standard
Cover against claims made by all members of staff, including workers employed through government schemes
Cover against claims by staff on work experience
Up to £500 compensation per day for each director, partner or employee attending court

What isn’t included in Employers Liability Insurance?

Work in or on, or travel to or from, any offshore installation or support vessel
Injury to an employee travelling in or on, or getting into or out of, a vehicle where any Road Traffic Act legislation applies
Liquidated damages, penalty clauses or fines

How much Employers Liability cover will I need?

How much employer’s liability cover you need will depend on how many employees you have, as well as the size and nature of your business. Working out how much cover you require also means understanding what you might be liable for – at Commercial and General we’ll work with you to get to the bottom of this.

Who does Employers Liability insurance cover?

It’s not just employees and contractors you might need to consider, it's anyone working for you in any capacity – trainees, apprentices, even just a friend helping at the weekend. No matter whether you’re a small business owner or a sole trader, if you have people doing work for you and they become ill or injured because of it, you’d be liable.

Your policy should cover claims brought by:

All permanent employees
Contract, casual and seasonal employees
Labour-only subcontractors
Apprentices

An employee is someone:

Who has National Insurance contributions and income tax deducted from their salary
Whose location, hours and conditions of their work are controlled by their employer
Who cannot be replaced by their employer if they are unable to work

Your policy should also cover claims brought by:

Temporary staff, including students and people on work placements
Volunteers, advisers, referees and marshals
For more information on insurance and volunteers see voluntary organisations

Is Employers Liability Insurance a legal requirement?

Yes, Employers’ Liability Insurance is a legal requirement for most businesses that have employees.

The definition of ‘employee’ can be a little complicated. Labour-only subcontractors may be counted as employees for the purposes of the legislation, while bona-fide subcontractors usually aren’t included. Seek advice if you’re not sure whether employers’ liability insurance is a legal requirement for your business.