Why you need it
As an employer, you need to look after the well-being of your staff while they are at work.
If one of your employees gets injured at work or becomes ill as a result of their job, you
could be held responsible and face compensation claims.
This could involve an accident at work if health and safety regulations were not met or even
the ill health of an ex-employee - if their illness was caused by their past employment with
you. If you are liable to pay compensation, employers' liability cover could help you meet
the cost of these claims.
Most businesses are required by law to have this type of liability cover in place.
You can read full details of these obligations in the Employers' Liability (Compulsory Insurance)
Act 1969 (ELCA). Exceptions can include family businesses or public organisations
(such as a government health body).
What does it cover?
Typically, employers' liability insurance will:
- Cover you for at least £10 million
- Cover any employee that works for your business. In most cases this will also include voluntary
or self-employed staff. - Cover accident and industrial illness claims of staff under your employment
- Cover compensation, damages and legal costs of defending your business.
Always check your policy documents carefully, so you know exactly what events your business is covered for.
Who needs it?
If you employ a member of staff - even if it's just one person, it's likely you'll be required by law
to have this type of insurance cover.
This will normally apply if any of your employees are normally based in England, Scotland or Wales
(including offshore installations or associated structures) Under the law in Great Britain, you'll not
normally need employers’ liability insurance to cover employees who are based abroad.
It's advisable, however, to check your particular situation as you may be required to have this
insurance if your employee spends continuous periods of time in Great Britain. Also, take a look at
the laws of any country where you have workers - so you can determine what measures should be
taken to protect your employees.
Even if you employ self-employed contractors, you'll probably still be responsible for their work and
need to make sure you have sufficient protection. This can be a bit of a grey area and will depend
on the relationship you have in place with your workers. For more detailed information, take a look
at the Health and Safety Executive (HSE) website.
You will probably not need to cover any students who work for you unpaid or people on work experience
or adult training schemes.
Some types businesses may also be exempt from this legal requirement - such as family businesses,
public organisations and health service bodies. If you're the sole employee of your limited company
and also own at least 50% of the share capital in the company - you might also be exempt.