Business Insurance

What Is Employers' Liability Insurance and Is It Mandatory?

The Legal Requirement

Employers' liability insurance is a legal requirement for almost all UK businesses that employ staff. Under the Employers' Liability (Compulsory Insurance) Act 1969, you must hold a minimum of 5 million pounds in cover - though most policies provide 10 million pounds as standard. Failure to have valid cover can result in a fine of up to 2,500 pounds per day. The Health and Safety Executive (HSE) enforces this requirement and can inspect businesses.

What Does It Cover?

Covers claims if an employee suffers an injury or illness as a result of their work, including: physical injuries from accidents at work, work-related illnesses such as repetitive strain injury, mental health conditions caused by workplace stress, and legal defence costs if a claim is disputed.

Who Needs It?

Full-time and part-time employees
Temporary and seasonal workers
Apprentices and work experience students
Labour-only subcontractors

Exemptions

You may be exempt if you are a sole trader with no employees, or if all employees are close family members and the business is not a limited company.

Displaying Your Certificate

You must display your employers' liability certificate where employees can see it - physically or electronically. Keep certificates for 40 years in case historical claims arise, such as asbestos-related illness.

Cost and Tips

A low-risk office business might pay 50 to 100 pounds per year
High-risk sectors (construction, manufacturing) pay considerably more
Often bundled with public liability in a combined business policy for cost savings
Keep your insurer updated when your workforce grows or changes

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