Employers’ liability (EL) cover is a legal requirement for any UK business that hires employees, including full-time, part-time, contractors or temporary staff.
It’s designed to cover the legal and compensation costs if an employee makes a claim against you.
EL insurance gives you protection from work-related risks.
For instance, if an employee suffered an injury or their property was damaged either at work or carrying out duties on behalf of your business and made a claim against you, employers’ liability would cover the legal costs to defend you and the compensation costs if their claim was successful.
Any business that has employees should have employers’ liability insurance. There are some exceptions, however, it’s best to check before proceeding without it, as you may incur a fine of up to £2,500 for every day you didn’t have it.
Employers’ liability insurance only covers you for claims made against you by employees.
It won’t cover you for claims made by the public, or for claims made by your clients for financial losses they suffered because of your professional mistakes.
It’s important to consider combining employers’ liability with other types of business insurance to make sure you’re covered for these sorts of things.
Whether an employee has threatened you with legal action or has already filed a complaint and you need to make a claim, it’s always recommended to contact your insurance provider before taking action. They will be able to advise you on the best way to proceed.
Employers’ liability is just one type of business insurance – there are many more on the market that could be relevant to your business.
The most popular types of business insurance that are bought with employers’ liability cover are:
Public liability insurance – covers you against claims made by a third party, such as a client, member of the public or contractor in relation to injury or damage to their property.
Professional indemnity insurance – covers you for legal and compensation costs associated with claims made by a business that loses money as a result of your professional mistakes.
Business contents insurance – covers your equipment, stock and devices such as computers, documents and even cash from damage or theft.
Directors’ and officers’ insurance – covers personal claims made against company directors or officers.
Cyber insurance – covers your business from risks associated with storing or handling data, such as data breaches involving sensitive information.
Depending on the type of work you do or the type of company you have, you may need to add other specific types of insurance to your policy, so it’s best to contact an advisor to find out what you may need.
You may need to pay an excess if you claim on your EL policy, however, this varies depending on your insurer.
There’s not a definitive answer to this, but the law states that you have a duty of care to anyone that is performing duties on behalf of your business, which technically includes volunteers.
UK businesses that have at least one employee are required to have a minimum level cover of £5 million. However, many policies will have far higher limits.
This varies between insurers. Some may lock you in for a year. You can also get flexible monthly insurance.
That means every time you change the number of employees you have, it’s easy to update this on your policy.
If you don’t have employers’ liability and you have employees, you may be fined up to £2,500 for every day that you haven’t had cover.