Employers' Liability insurance

What is Employers' Liability insurance?

Employers’ Liability insurance can protect you and your business against the cost of compensation claims due to illness or injury to your employees, caused by their work for you.

Employers’ Liability insurance is a legal requirement for almost every business that employs staff, including contractors, casual workers and volunteers. Failure to hold adequate insurance can result in fines of up to £2,500 per day.

What does Employers' Liability cover?

If one of your employees injures themselves or becomes ill as a result of the work they do for your business, there’s a chance they could make a claim against you.

In the event of a legal battle with a member of staff, Employers’ Liability insurance may cover you for any legal or compensation costs.

Do I need Employers' Liability cover?

Employers’ Liability insurance is a requirement for any business that has employees, such as:

  • Full-time and part-time employees
  • Self-employed contractors you hire
  • Temporary staff, apprentices and volunteers
  • People taking part in work experience or training schemes

However, there are some exceptions:

  • if you are a family business and only employ close members of your family you are exempt (although this exemption does not apply to family businesses incorporated as limited companies)
  • most public organisations, health service bodies, and some other organisations financed by public funds are exempt
  • limited companies where you, as the owner, are the only employee (and provided you own 50% or more of the company’s share capital.

Is Employers' Liability a legal requirement?

If you are required to have Employers’ Liability insurance and do not have it, you can be fined up to £2,500 for every day you do not have cover, or £1,000 if you refuse to show your certificate of Employers’ Liability insurance to an HSE inspector.

More details on your obligations under the Employers’ Liability Act can be found from the Health and Safety Executive and on the UK Government website.

What kind of claims can Employers' Liability insurance provide cover for?

Employers’ Liability insurance is designed to cover the costs if an employee claims compensation for illness or injury that they believe has been caused by their work.

For example:

  • An employee is injured whilst operating machinery due to the employers’ negligence (such as improper machine maintenance, inadequate protective equipment or insufficient training).
  • An employee becomes ill as a result of working at your business, for example through contact with toxins. This can be an employee who no longer works for you, but their illness can be traced back to your business. Even if you no longer have Employers’ Liability insurance, as long as you had a policy while that employee was working for you, your business will be covered.
  • An employee trips on frayed carpet while carrying a hot cup of coffee, and gets burned.
  • An apprentice forgets to earth a cord, and accidentally electrocutes themselves. Even though it may seem like the apprentice’s fault, the business will be responsible if they have not been given adequate health and safety training for the specific task that caused the injury.

How can I buy Employers' Liability insurance?

Employers’ Liability insurance is available as optional £10m cover when you take out Public Liability insurance.

How can Lloyds Bank Business Insurance Services help you protect your business?

We know your business is important to you, and keeping it safe and secure will allow you to focus on the important day to day tasks.

To help you do this we have chosen to work with Arthur J. Gallagher Insurance Brokers Limited, one of the UK’s largest insurance brokers.

This service will provide you with access to specialist insurance advisors who will search a panel of leading insurers offering a range of products. To get you the cover you need at the price you want.

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If you’re not sure what you need, call to speak to experienced public liability advisers.

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