Employers' Liability Insurance - The Ultimate Guide
In 2018/2019, it is estimated that 581,000 workers in the UK sustained non-fatal accidents - while 147 deceased on their workplace. You are a business owner and you are worried about your employer's liability ? You should better be careful when picking up your business insurance plan. That may avoid you serious troubles if anything happens to your workers.
What is employers’ liability insurance?
The employers' liability insurance acts as a protection for any business owner hiring staff against a compensation claim that he may receive when one or several workers are injured or get ill in their workplace. It is established by the UK law that an employer can be held liable to his employees health and safety while they are working. Business owners that do no purchase any employers' liability insurance are subject to pay a fine which can be very high (see below).
What does employers’ liability insurance cover?
Your employer's liability insurance covers the costs of an injury or illness suffered by one of your workers in the workplace - whether it has to do with its activity or not. For example, if your employee falls down the stairs of your building, you are held liable for the injuries that result from this unfortunate accidental situation.
Your employer's liability insurance can therefore cover costs such as :
- Compensation payments for injuries or illnesses suffered by your employees - which take into account factors such as medical costs induced or loss of income for the worker
- The corresponding legal costs if a case goes to the Court
Do I need employers’ liability insurance in the UK?
Having an employers' liability insurance is a legal requirement in the UK, for any business owner having at least one employee. This obligation remains valid even if your only employee works under a temporary contract. However, it exists exemptions to the legal employers' liability insurance obligation, for certain categories of businesses (see below).
How much is employers’ liability insurance?
The cost of an employer's liability insurance cover will always depend on a range of criteria, within which the number of employees is the most determinant. The more employees you will have, the more expansive your insurance will be. That is why there is no global average price to be given. However, the here-below table give an idea on how much is employers' liability insurance depending on your company's size :
|Number of employees||Indicative cost for an employers' liability insurance|
|Only 1||From less than £5 / month for a basic cover|
|10||From £45 / month to much more|
|50||From £200 / month to much more|
|200||From £650 / month to much more|
|1000||From £2500 / month to much more|
Which companies are exempt from employers’ liability insurance?
In some particular cases, it happens that an exemption allows a business owner not to subscribe mandatorily an employers' liability insurance. You are exempted when you are:
- A limited company, when you employ only one person which owns more than 50% of the shares of the company's capital
- A not limited company with one only employee who has the status of sole trader
- Two or more directors with the status of equal partners in the business, and you do not have employees
- An organization within the public sector (such as a healthcare service or a governmental agency) - not all are exempted though
- A family company, within which the staff is composed of direct family members
How much employers’ liability insurance do I need?
There are different levels of cover depending on which employers' liability insurance plan you will opt for. Here are the most common levels of cover chosen by the UK companies :
|Level of liability cover||In which case ?|
|£5,000,000||The minimum employers' liability insurance cover level required by law. May be chosen by the smallest companies.|
|£10,000,000||The standard cover level that the majority of employers' liability insurance providers propose.|
Some particular organizations might be eligible to derogatory levels of employers' liability cover. For more information, you can consult the government's dedicated webpage.
Do I need employers’ liability insurance for temporary workers?
Answer is a firm yes : you have to subscribe an employers' liability insurance for your temporary workers. Those employees may be :
- Temporary employees
- Part-time workers
- Interns (paid or not)
Do I need employers' liability insurance for students?
If you welcome within your company a student who is not a direct family member of yours, you must subscribe to an employers' liability insurance for the duration this student will stay within your premises - whether he is paid or not. Indeed, as for any paid worker, a business owner has the responsibility to take care of the safety and health of the students he / she welcomes.
Do I need employers' liability insurance for volunteers?
This question is mostly asked in the case of charities welcoming volunteers within their premises. It is recommended for any organization having volunteers working to subscribe an employers' liability insurance policy. In case a volunteer makes a claim after being injured or ill, this is the best guarantee to avoid a defense on the organization's own funds.
What happens if I don’t have employers’ liability insurance in the UK?
As said above, subscribing to an employers' liability insurance policy is a legal obligation in the UK. The government warns companies that 'you can be fined £2,500 every day if you are not properly insured'.
If an inspection is made into your company, you must be able to present to the government inspectors your employers' liability certificate (EL certificate). You'll be immediately fined £1,000 if you are unable to present this document.
How can I compare employers’ liability insurance?
The best way to find the deal most suited to your company's need at the best price is to use a business insurance comparator, such as the one we propose. Use our online insurance comparator and check our trusted providers.
Our top 10 tips before you pick up your employers’ liability insurance
Here is a list of tips you'd better bear in mind when your pick up your employers' liability insurance quote :
- Make sure you choose at least the legal minimum cover, which is £5,000,000
- If you are a big company, try to calculate the costs that could represent claims on which you could be held liable as an employer, and choose the adequate level of cover
- If you have in your premises unpaid workers - such as students or volunteers - do not forget to get cover for them too
- Do not always choose the cheapest deal. An appropriate employers' liability insurance is meant to protect you in case something wrong happen, the risk shouldn't be minored
- If you think you can be exempt from employers' liability insurance, check it twice
- Once you have purchased your employers' liability insurance, always keep with an EL certificate, in case you are subject to an inspection
- If appropriated to your business, don't hesitate to combine your business insurance into a package which includes employers' liability insurance
- Try to choose an insurance plan where the legal fees' cover level is high - they can reach huge amounts if one day you are sued by one of your employees
- If you have a doubt on whether you have to get employers' liability insurance or not, consult your lawyer for accurate responses
- Compare the best business insurance packages with an online platform such as HelloSafe
On this particular point, the Health and Safety Executive (HSE) has expressed a clear position. If there is contractor working for your company, but also dedicating work to other companies on the same time, you are not to be held liable as employer if something occurs with that person. However, there can be exceptions depending on the situation, so it is better in that case to speak with your legal advisor.
The employers' liability insurance covers the risks of an injury or illness affecting the employees of a company within their work environment. Instead, public liability insurance covers damages that could be made by an employee to a member of the public. Indeed, those are two different covers - the first applying for members inside the company, the second applying for people outside the company (but affected by its activities).
This is a tricky case. There might not be a precise answer to that question, for it depends a lot on the work relationship between the company and its subcontractor. When the subcontracted person dedicates itself only to your company, using the company's equipment, you might be considered liable for injury or illness that could affect him / her. In doubt, discuss it with your legal advisor.
There exist a vast range of business insurance types - within which the employers' liability insurance is the only mandatory one. To effectively protect your company against any risk, you might want to purchase a business insurance package, including policies such as public liability of professional indemnities. You can also pick up extra covers to insure your premises, your stock, your equipment, your tools, business interruption, etc.