What is employers' liability insurance?
Think of employers’ liability insurance as a financial safety net for your business. If an employee gets injured or falls ill because of their work for you, they might make a claim against your business. Employers' Liability Insurance steps in to cover the costs of compensation, legal fees, and even medical bills.
For example, let’s say one of your employees suffers from repetitive strain injury due to inadequate training on your equipment. They might file a claim, and without EL insurance, your business could face thousands—or even millions—of pounds in costs.
With EL insurance in place, you can focus on running your business, knowing you’re covered for the unexpected.
What does employers' liability insurance cover?
Employers’ Liability Insurance is there to cover claims from employees who are injured or become ill due to work-related reasons. Here’s what it typically includes:
- Compensation claims: Covers payouts if an employee wins a claim against your business.
- Legal costs: Pays for your defence if you need to go to court.
- Medical expenses: Includes costs for rehabilitation or treatment related to the claim.
EL insurance doesn’t just cover incidents that happen on-site. It can also cover illnesses or injuries that develop over time—like industrial deafness or long-term back problems.
Employers' liability insurance at Suited
Who needs employers' liability insurance?
If you employ staff, even part-time or casually, you almost certainly need Employers’ Liability Insurance. This includes:
- Full-time and part-time employees.
- Apprentices, interns or volunteers.
- Contractors or freelancers under your supervision.
Even if they’re not on a formal contract, if you control how, when, or where they work, the law considers you their employer.
Is employers' liability insurance required by law?
Yes, in most cases, employers’ liability insurance is a legal requirement in the UK if you employ staff.
If you fail to have valid EL insurance in place, you could face severe penalties, including:
Fines of up to £2,500 per day for operating without cover.
An additional £1,000 fine if you cannot provide proof of insurance (e.g., your certificate) when requested by an inspector.
Are there any exceptions?
Not every business is required to have Employers’ Liability Insurance. You might be exempt if:
- You’re a sole trader without any employees.
- Your business only employs close family members, such as a spouse, parent, or child (this exemption doesn’t apply if your business is incorporated as a limited company).
- Your employees are based abroad, and the laws of their country don’t require EL insurance.
Even if you fall under one of these exemptions, having EL insurance is still a smart move. Accidents can happen, and insurance provides financial protection and peace of mind.
If you employ anyone, Employers’ Liability Insurance isn’t just a good idea—it’s the law. It protects your business financially while ensuring your team is covered for the unexpected. By getting the right cover in place, you can focus on growing your business with confidence, knowing you’re fully compliant and protected.
How much employers' liability insurance do I need?
The law requires a minimum of £5 million in cover, but many insurers offer £10 million as standard. For most small to medium-sized businesses, this is more than enough.
However, if you operate in a higher-risk industry—like construction or manufacturing—you might need additional cover. It’s worth checking with your insurer to ensure you’re protected against your specific risks.
