A Guide to Employers' Liability Insurance

Whether you have one employee or an expanding workforce, employers’ liability insurance is a vital part of your liability insurance for your business.

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What is employers’ liability insurance?

Employers' liability insurance is a legal requirement for the majority of businesses that employ staff, no matter what size. The policy can cover the cost of compensation should an employee incur an injury or illness as a result of work they are carrying out on behalf of the business. As well as covering the cost of compensation, the policy can also cover the cost of the claim and legal expenses incurred by the business whilst defending the case.

When looking at what policy to buy it is important that you consider what cover your business needs. Whilst a minimum of £5 million is available, some firms may require more and many insurers can offer small businesses as much as £10 million worth of cover.

Carrying out a risk assessment of your business and its day-to-day operations will help give a better understanding of your company and its requirements when looking for employers' liability cover, in order to ensure that you have a policy to suit your needs.

Do I need employers’ liability insurance?

If you have contracted employees you will almost certainly need employers' liability insurance. Employers can be fined of up to £2500 a day whilst they don't have adequate liability cover.

There are some other occasions that are exempt but these can vary depending of the nature of the work, the relationship, the contract between you and the staff member. Always seek advice before you leave yourself, your business and your employee vulnerable.

How much employers' liability insurance do I need?

To meet the legal requirement cover of £5 million is typically needed, but most insurers – including Towergate – will offer up to £10 million. Compensation claims for staff are often very high, which is why the insurance is compulsory.

Employers' liability insurance excess

The legal minimum cover in the UK £5 million. This means you must be able to pay out up to this amount in compensation claims including costs. The insurance company that provides your cover will pay the full amount in the event in a claim meaning you don’t have to pay an excess or part of the claim.

This is only the legal minimum though and a larger business may require more depending on the nature of the business and the number of employees. If you are unsure to the amount you need, your adviser/broker will ask a number of questions during a quote which will give them the insight into your business which help them to find the right level of cover.

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Things to consider when buying employers' liability insurance

  • Be honest - when speaking to an insurance adviser it is important that you discuss your business risks in order to ensure that your coverage is comprehensive.
  • Be thorough - read the terms and conditions of your employers' liability insurance policy to make sure your company's requirements are fully covered.
  • Consider the risks - if an accident caused a member of your staff to get injured you could be liable for many thousands of pounds worth of damages. Not only is it important to consider the welfare of your staff but also the impact on your business it might have.

When you take out the insurance you will receive an employers' liability insurance certificate. You are required to display this for all of your employees to view. Since 2008 this can also be displayed digitally, although you must be confident all of your employees fully understand how to access it, and where it is.

It is important to be aware that your employers' liability certificate must be on display in an area that all your employees have access to, as failure to do so could result in a £1,000 fine. Watch the video below to find out more about displaying your employers' liability certificate.


There are a few situations where a business is not legally required to have employers' liability insurance. If all your employees work abroad, for example, UK law would not require this of you. However, this doesn't mean that you don't have a duty of care to your employees, or that you wouldn't be held liable if there was a claim.

Buying employers' liability insurance

At Towergate we offer bespoke employers' liability insurance to suit your needs. Read more about our policies online or call us on 0344 346 0409 to speak to a specialist adviser.

Want to find out more about our Employers' Liability Insurance?

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