What is employers' liability insurance?
Employers' liability insurance covers you if an employee becomes ill or is injured as a result of their work. It's a legal requirement for most businesses that employ staff, including part-time workers, temporary staff, and apprentices.
You must have cover of at least £5 million (most policies offer £10 million as standard). Failure to have adequate cover is a criminal offence carrying fines of up to £2,500 per day.
Who needs it?
- Any business with employees (including part-time and temporary staff)
- Companies with directors who aren't the sole shareholder
- Businesses using labour-only subcontractors
- Organisations with volunteers in some cases
The main exemptions are sole traders with no employees, and family businesses where all employees are closely related to the owner.
💡 Display your employers' liability certificate where employees can easily read it, or make it available electronically. You can be fined £1,000 for failing to display it.
How much does it cost?
Costs depend on your industry, number of employees, and claims history. A low-risk office business might pay £50–£100 per year per employee, while a construction firm could pay £200–£500+ per employee.
You can reduce costs by maintaining strong health and safety practices, implementing risk assessments, and having a clean claims history.
Claims and cover
Employers' liability covers compensation claims from employees who suffer injury, illness, or death due to their work. This includes physical injuries, work-related stress, and illnesses caused by workplace conditions.
Claims can be substantial — serious injury or death claims can reach millions of pounds. Without insurance, your business would be personally liable for the full amount.
⚠️ Not having employers' liability insurance when you need it is a criminal offence. Fines can reach £2,500 per day of non-compliance.
How to get the right cover
A specialist insurance broker can compare quotes from multiple insurers and find the right cover at the best price. Get matched with a business insurance broker through Nesto.