Employers' liability insurance

Whether you’re a small business or large organisation, if you have any employees or apprentices it’s a legal requirement to have employers’ liability insurance in place – and you could be fined £2,500 every day you are not properly insured.

You will likely need employers' liability insurance under the following circumstances:  

• There is a contract of employment in place, whether spoken, written or implied
• They do the same work and under the same conditions as other employees – for example, work experience staff, volunteers or apprentices
• You manage your employees’ salaries, including deducting income tax and National Insurance
• You control when and how people work , and supply the tools, materials and equipment
• You have a right to any profits your workers make 

Read more about employers liability insurance

Get an employers’ liability insurance quote.

There are also a small number of organisations not legally obliged to have employers’ liability insurance in place, such as health service bodies or family businesses where all of the employees are closely related.

You can find a full list of the main exemptions in the Employers’ Liability (Compulsory Insurance) Act 1969.

If you have employees, then it’s a legal requirement that you have at least £5 million employers’ liability insurance in place – and you could even be fined up to £2,500 for every day you are not properly insured under the Employers’ Liability (Compulsory Insurance) Act 1969.

But outside of your legal obligations, it’s also your responsibility to safeguard the health and safety your employees whilst they’re working for you. This applies to:

• Full-time staff
• Temporary and part-time staff
• Work experience and apprentices
• In some instances, volunteers (sometimes volunteers are covered by your public liability insurance)

Employers’ liability can either be included as a cover under a combined business insurance policy, or purchased as a standalone employers’ liability insurance policy.

What about contractors and subcontractors?

You should also consider whether you need cover for freelancers, contractors or subcontractors, as you may need to cover them under your employers’ liability insurance if they’re using your equipment, or depending on whether they’ve been hired on a “bona-fide” contract or labour-only basis.

Get an employers’ liability insurance quote.

Employers’ liability insurance will protect your business against compensation claims made by employees following injury, illness or damage to their property in the workplace, and is a legal requirement for anyone employing staff in the UK.

Public liability insurance is not a legal requirement, but provides very similar cover to employers’ liability with the key difference that it protects against compensation claims made by members of the public - including clients, customers and, in some cases, volunteers.

You are only legally required to have employers’ liability insurance for workers you employ under a contract of service or apprenticeship, and whether or not you need cover in place will depend on the terms of your contract with them.

This is regardless of whether you usually call someone an employee or self-employed, what their tax status is, or whether the contract is spoken, written or implied – so it’s important to know where you stand with your workers so you can ensure you have the right cover in place.

Volunteers can be a grey area, as they can either fall under your public or employers’ liability insurance. If you’re not sure what cover you need in place for volunteers or unpaid staff, speak to one of our expert consultants on 0333 234 0021.

Once you take out cover, your insurance provider will issue a certificate of employers’ liability insurance confirming the cover you have in place.

It’s a legal requirement for you to display this certificate, and you could be fined up to £1,000 for not doing so.

Therefore it’s important to make sure either a physical copy is displayed, or you put it online for your employees to access - such as on a SharePoint site. You should also make sure your certificate is available should an inspector ask to see it.

An Employee Reference Number (ERN) is a unique number given to businesses that register with HM Revenue and Customs as an employer, so your insurer may ask you to provide your ERN when you get an employers’ liability insurance quote.

Employers’ liability insurance is usually provided on a ‘claims occurring’ basis, which means that your policy will cover any claim that occurs during the period of insurance, regardless of when the claim is made. The purpose of the ERN is to help your insurer identify and settle claims that are raised after your insurance policy period has ended, or if the business is no longer trading.

Under UK law you are required to have employers’ liability insurance in place for all employees that are normally based in the UK, including offshore installations and associated structures.

However, you will require cover for overseas employees if they are going to spend more than 14 days continuously in the UK, or more than seven days on an offshore installation.

If you do have employees based abroad, it’s still worth checking the laws of the country they reside in to make sure all your legal obligations have been met.

There are a number of different factors that will be taken into account when giving a quote for employers’ liability, such as the size and nature of your business. We will also need to know the following:

• Will your employees be doing clerical or manual work?
• How many employees do you have?
• What is the wage role of your business?
• Will any directors be doing clerical or manual work?
• Will any employees be working with heat or at height?

Every business is different, which is why we make it easy for you to find flexible, affordable protection against a number of different risks. You can select the following covers when you get a quote with us: 

Public liability insurance

Protection for your business if a customer injures themselves or their property is damaged as a result of your business operations. Select the level of cover you need with levels of cover set at £1 million, £2 million and £5 million.

Business equipment insurance

If your business relies on any special equipment, business equipment insurance can protect it from damage, theft and loss.

Tools cover

This provides cover for any handheld tools or power tools in the event of loss, theft or accidental damage.

Business stock insurance

If your business keeps stock on the premises, business stock insurance can protect if from damage, theft and loss.

Contract works

Covers loss or damage to property or materials forming part of the contract works. When deciding on this cover, you should consider the conditions of cover, excesses and cover limitations or exclusions which could affect your ability to claim.

The cost of your cover will depend on a number of different factors – such as what type of business you run and how many employees you have, as well as what sorts of tasks they’ll be carrying out day-to-day. We work with a panel of leading commercial insurers to ensure we find you the right cover, at an appropriate price. If you’d like to know more, speak to one of our expert consultants.