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Employers' Liability Insurance
Employers’ liability insurance can protect you and your business. It can cover the cost of compensation claims from employees due to illness or injury caused by their work due to employers’ negligence.
Insurance solutions from Gallagher
To provide you with Business Insurance Lloyds Bank works with Gallagher, one of the UK’s largest insurance brokers.
How does employer’s liability insurance work?
Employers’ liability insurance can pay the legal costs and compensation if an employee sues for a work-related injury or illness. It’s a legal requirement for almost every type of business to have this cover in place.
Employers’ liability insurance is offered as an add-on to any of the insurance policies listed below.
Is Employers' Liability a legal requirement?
Employers’ Liability Insurance is a legal requirement for most business with employees. This can include:
- Full-time and part-time employees.
- Self-employed contractors you hire.
- Temporary staff, apprentices, and volunteers.
- People taking part in work experience or training schemes.
If you are required to have Employers’ Liability Insurance and do not have it, you can be fined:
- Up to £2,500 for every day you do not have cover.
- £1,000 if you refuse to show your proof of cover certificate to an HSE inspector.
How much cover do I need?
UK law requires most employers to have at least £5 million of cover.
Some types of companies are exempt from this. Most policies offer up to £10 million of cover.
Businesses in high-risk sectors may wish to take out a higher level of protection to make sure any claims are covered.
Examples of Employers’ Liability Insurance claims
Employers’ Liability Insurance covers the costs of employee claims for illness or injury caused by their work due to employers’ negligence.
For example:
- An employee is injured whilst operating machinery due to the employers’ negligence. This may include poor machine maintenance, protective equipment, or training.
- An employee falls ill because of working at your business, such as through contact with toxins. This can be an employee who no longer works for you if their illness can be traced back to the negligence of your business when employed by you. If you had a policy while the employee was working for you, your business will be covered.
- An employee trips on a frayed carpet while carrying a hot cup of coffee and gets burned.
- An apprentice forgets to earth a cord and electrocutes themselves. In this case, the business is responsible if they have not given proper health and safety training.
When don’t I need Employers’ Liability Insurance?
- If you are a family business and only employ close members of your family, you are exempt. This does not apply to family businesses that are part of limited companies.
- Most public organisations, health service bodies, and some publicly funded companies are exempt.
- Limited companies where you, as the owner, are the only employee. Provided you own 50% or more of the company’s share capital.
UK law requires most companies to have a policy that covers at least £5 million.
More details on your duties under the Employers’ Liability Act can be found here:
Keep in mind
Insurance covers are subject to the individual terms, conditions and exclusions of the insurer providing them. Always review the policy documentation supplied during the quote process to ensure you have the cover you need.
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