Do I need employer's liability insurance?


If you employ any members of staff, it’s highly likely that you’ll need to put employers’ liability insurance in place. In fact, most employers are required by law to have adequate liability insurance to cover their workforce – even if this is just one other member of staff.
If you’re considering taking on an employee for the first time, here’s an overview of this insurance and why it’s needed.

What is employers’ liability insurance?

As an employer, you have a responsibility for the health and safety of your staff while they’re at work. If one of your employees becomes ill or is injured as a result of working for you, they may make a claim against you. Under the Employers’ Liability (Compulsory Insurance) Act 1969, you must have at least a minimum level of insurance to cover such claims.

Do I need it?

If you have employees, it’s very probable that this insurance is a legal requirement. However, there are some exemptions including some public organisations, health service bodies, family businesses and businesses where the employee also owns 50% or more of the share capital. For more information about who is exempt, the HSE employers’ liability guide.

What does it cover?

If an individual suffers an illness or an injury as a result of working for you, they may hold you responsible and file a claim against you for compensation. For example, if someone trips over a loose cable at work and breaks their leg – they may be eligible for compensation. Equally, a former employee might also claim against you if they believe they’ve become ill as a result of the work they did for you.

How much cover do I need?

If you do need this insurance, you’ll typically be required to have cover of at least £5m. Depending on your risks and liabilities, you may need to have to increase your insurance cover and most insurers will offer a minimum of £10m.

Must I tell my employees about the cover?

When you take out a policy (or renew an existing one), you must display a copy of the certificate of insurance where your employees can easily read it. You’re also able to do this electronically – but you must ensure that all employees know how to access it.