Employers Liability Insurance

Why do I need Employers Liability insurance cover?

Employers’ Liability Insurance is a legal requirement for businesses in the UK with at least one employee. Under the Employers’ Liability (Compulsory Insurance) Act 1969 you are required to hold a policy with a minimum level (£5,000,000) of cover. Not holding a current Employers’ Liability policy that is compliant with current UK law could lead to a significant fine across the time that there was no policy is not in place. Certain organisations are exempt from this.

As an employer, you are responsible for the health and safety of your employees while they are at work. If an employee suffers an injury or falls ill, you may be held liable.

A Claim Example

An example could be an employee falling off a ladder or slipping on a floor, or an employee contracting a disease because of something you were unaware of.

What should I do if I think an incident may have occurred?

Any incident must be reported to Inksurance in the first instance and we will work on your behalf to liaise between you and the Insurance Company to ensure the claim is settled as quickly as possible.


The answer is an emphatic yes! Most insurers will ask you a direct question in relation to liquidation or bankruptcies, it may be for a limited period or ask you to declare any incidents ever. It’s important to answer the question correctly as this is often an area that comes up when insurers are investigating claims.

This is when a proportional amount of the premium is refunded in line with the amount of time that remained on the policy.

On some occasions they do via selected registers. The best approach is to declare everything you think is relevant, thus removing any concerns you may have about historical data.

With Employers’ liability insurance it is possible to pay the compensation amount and legal costs if an employee claims compensation for a work-related injury or illness.

For example, a member of your team based in an office, trips over a trailing computer lead, they may decide to make a compensation claim. A court could order you as the employer to pay compensation for injury, costs and other damages related to the incident. In this case the compensation amount and legal fees could be paid for by the Employers’ Liability Insurance.

The insurance will cover the compensation payment and legal costs up to the limit of the policy, which would ordinarily be £10m.

There is no set cost for Employers Liability Insurance. It will completely depend on the type of work you do and can take into account your company turnover and number of employees dependent on the policy.

As with part time staff or volunteers, you will still need Employers’ Liability to cover temporary employees.

It completely depends on whether they are ‘labour-only’ or ‘bona-fide’ subcontractors. Subcontractors who are ‘labour-only’ work under your direction and may wear your uniform and use your equipment and materials. These subcontractors are legally considered employees, and so they need to be covered by your Employers’ Liability policy.

‘Bona-fide’ subcontractors work under their own direction and provide their own working equipment and materials etc. They usually don’t need to be covered by your Employers’ Liability policy. It is always worth checking they have their insurance documentation before they start working for you however.

Some organisations could be exempt from Employers’ Liability, for example those who only employ close family members (as long as they’re not incorporated as limited companies).

Most employers are required to have Employers’ Liability Cover of at least £5m or they could face fines of up to £2,500 per day. You will still require Employers’ Liability even if you have only part time staff or volunteers working for you.

Only if you have no leeway within your policy and are required to do so under the terms of the wording. Most policies that require a turnover to be declared will be based on a year-end adjustable basis. This means that provided you do not exceed any of the triggers (i.e. exceed 25% or 50% of declared turnover) then you can wait until renewal and make a declaration. Insurers will reserve the right to charge if the amount is higher than the original declared amount. You will need to check what allowances your policy makes.

This is a non-refundable insurance policy, usually reserved for liability insurance policies.

Consumer policies tend to have a cooling off period. Some commercial policies will offer a pro rata cancellation refund if cancelled mid-term. Some policies are known as minimum and deposit. This means all the premium is due from the moment you take up the policy with no refunds given. It is always worth consulting with us regarding any questions you have around this. Our aim is always to provide you with the insurance solution which best fits your business and current needs.

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