Employers' liability insurance
Cover options for employers, including injury and illness claims from staff, legal costs and the minimum limit the law usually requires.
What is employers' liability insurance?
Employers' liability insurance covers your legal liability if an employee is injured or becomes ill because of their work for you. It pays compensation and legal costs, up to the limit on your policy. Under the Employers' Liability (Compulsory Insurance) Act 1969, employers in Great Britain usually must hold it, with a minimum limit of £5m.
PIB Insurance Brokers arranges employers' liability as part of wider cover for businesses and charities, usually alongside public liability. A broker can be particularly helpful when your workforce is more complex, for example labour-only subcontractors, volunteers, seasonal or agency staff, staff working abroad, or work with higher risk such as construction, manufacturing or work at height.
What employers' liability insurance covers
Employers' liability is usually part of a business policy, often combined with public liability, with related covers to consider alongside it. The summaries below are general examples of what may be covered in each section; your policy schedule and wording decide what is and isn't covered in any claim.
Core covers
Injury and illness at work
Compensation to employees injured or made ill because of their work, including illnesses that develop over time, such as industrial deafness.
Watch for: Claims covered by motor insurance, such as injuries from driving a vehicle on the road.
Legal costs
The cost of defending claims, including representation at some inquests and prosecutions under health and safety law.
Watch for: Fines and penalties, which can't legally be insured.
Who counts as an employee
Staff on contracts of employment, and often apprentices, work experience students, labour-only subcontractors and volunteers.
Watch for: The definition of "employee" varies by policy, so check who is included.
Limit of indemnity
At least £5m by law. £10m is commonly offered as standard.
Watch for: Contracts that ask for a higher limit, and limits for claims from terrorism.
Optional covers to consider
Public and products liability
Claims from customers, visitors and the public. See our public liability insurance page.
Watch for: Employers' liability doesn't cover people who aren't employees.
Personal accident
Fixed benefits for employees injured at work, whether or not you're at fault.
Watch for: Benefit limits and exclusions for pre-existing conditions.
Employment practices liability
Claims such as unfair dismissal and discrimination. Usually covered by management liability insurance, which we can arrange.
Watch for: Employers' liability covers injury and illness, not employment disputes.
Legal expenses
Legal costs for employment disputes and some health and safety prosecutions.
Watch for: Disputes that began before the policy started.
Do I need employers' liability insurance?
If you employ anyone, you usually need it, including part-time, casual and temporary staff. In England, Scotland and Wales, you could be fined up to £2,500 for every day you're not properly insured, and up to £1,000 if you don't display the certificate or make it available to staff.
You may be exempt if, for example:
- Family businesses: all your employees are closely related to you, unless the business is a limited company.
- One-person companies: your company's only employee is its owner, who holds 50% or more of the shares.
- Public bodies: some public bodies are exempt.
The Health and Safety Executive's guidance sets out the full rules. Northern Ireland has its own legislation.
Subcontractors, volunteers and agency staff
Whether someone counts as your employee for this cover depends on how much control you have over their work, not just their contract. Labour-only subcontractors often count. Tell your insurer about everyone who works for you, so the policy covers them.
What employers' liability insurance does not cover
Typical limits across employers' liability policies:
- Road traffic accidents: injuries to employees from driving vehicles on the road are usually covered by motor insurance.
- Fines and penalties: health and safety fines can't legally be insured.
- Undeclared work: claims from activities not declared, such as work at height or overseas, may be excluded.
- Bona fide subcontractors: contractors who supply their own labour and equipment and carry their own insurance usually aren't covered.
- Claims above your limit: the policy pays up to its limit of indemnity, and anything above that is usually yours to pay.
Conditions matter too: claims may also be reduced or declined if policy conditions aren't met. Common examples: risk assessments not carried out, training not recorded, or an accident not reported to the insurer promptly.
How much does employers' liability insurance cost?
There is no standard price. What you pay depends on your trade, the number of employees and your wage roll, the work they do, your health and safety arrangements and your claims history.
What affects the cost
- Trade and activities: work at height, heavy machinery and heat work usually cost more to insure than office work.
- Wage roll: insurers usually base the premium on the wages you pay.
- Health and safety: risk assessments, training records and accident reporting may help.
- A clean claims record: insurers usually look at the last three to five years.
Why work with PIB Insurance Brokers
We explore your options
We can approach insurers that cover your trade and set out the differences in cover, not just price.
We check everyone who works for you is covered
Subcontractors, volunteers, agency staff and work abroad may each change what you need to tell your insurer.
We look for common gaps
Undeclared activities, a limit below what contracts require, or a definition of "employee" that leaves people out.
Here when things change
Our team is on hand throughout the policy year for advice, whether your circumstances change or you're not sure what to do next.
What our clients say
Reviews from PIB Insurance Brokers clients across the sectors we work with, collected by Reviews.io.
Employ staff, subcontractors or volunteers? Check you're covered.
Get a quoteFrequently asked questions
Does employers' liability insurance cover contractors?
It depends on how much control you have over their work. Labour-only subcontractors, who work under your direction, often count as employees and need to be covered. Bona fide subcontractors, who supply their own labour and equipment and have their own insurance, usually don't. Tell your insurer about everyone who works for you.
Do I need employers' liability insurance for volunteers?
The law usually doesn't require it for volunteers, but volunteers may still make claims if they're injured. Many insurers include volunteers within the definition of employee, and charities and community groups usually want them covered. Check your policy.
Do company directors need employers' liability insurance?
It depends. A company whose only employee is its owner, holding 50% or more of the shares, is usually exempt. Companies with two or more directors, or with other staff, usually need it. The Health and Safety Executive's guidance sets out the rules.
Is employers' liability the same as public liability?
No. Employers' liability covers injury or illness to your employees and is usually required by law. Public liability covers injury or damage to customers, visitors and the public, and isn't a legal requirement. They're often sold together.