Employers liability insurance in the UK

Employers’ liability insurance is a compulsory requirement for any UK business with staff. It may sound intimidating but fear not - our experts at Dojo have put together this quick guide so you can better understand the essentials about employers’ liability insurance, from what it is to who needs it and why.

We'll cover:

• What is employers' liability insurance?
• Who does employers' liability insurance cover?
• What does employers' liability insurance cover?
• How much does employers' liability insurance cost?
• Who needs employers' liability insurance?

What is employers’ liability insurance in the UK?

No matter how safe a workplace may be and with all necessary precautions taken, accidents can still happen. If an employee is injured or cannot work due to an accident or illness in the workplace, Employers’ Liability Insurance covers their compensation, this is also sometimes referred to as an accident at work claim.

Employers are responsible for the health and safety of staff during work hours whilst at work or working and Employers’ Liability Insurance can help safeguard businesses from compensation claims and legal fees.

Note that if your business is facing a claim you should always seek independent, professional legal advice or counsel. You can find out more on GOV.UK here.

Who does employers’ liability insurance cover?

Employers’ Liability Insurance typically covers full-time, part-time, contractors, work experience, apprentices, temporary staff and volunteers. Essentially, anyone who works for your business in any capacity should be covered by EL Insurance in the UK. However, this may differ depending on your cover or the nature of the claim should your business ever be claimed against. You can check with your FCA approved insurance provider for details about your cover.

What does Employers’ Liability Insurance cover?

Employers’ Liability should cover lawsuits, prosecution costs and settlements, including everything from damages to settling any claim from current or ex-employees. Claims made from an accident or incident caused by the workplace should be covered by EL Insurance. However, if your business has been implicated in a claim, you should check your cover details with your insurance provider and seek professional, independent legal advice.

Why is employers’ liability insurance important?

Employers’ liability insurance isn’t just about meeting legal requirements – it’s about protecting your business from unexpected costs that could otherwise be devastating. Even a small accident at work can lead to a claim for compensation, legal fees, and lost productivity. Without cover, these expenses come directly out of your business, which could impact cash flow or even threaten its survival. Having the right policy in place gives you peace of mind that you can handle any claims quickly and fairly, while showing your team that their safety and wellbeing matter to you.

How much does Employers’ Liability Insurance cost in the UK?

As every business is different, so are the costs for EL Insurance. Factors such as your industry, the number of employees and the level of risk will all contribute to how much your Employers’ Liability Insurance will cost. The level of cover you choose will also affect the price.

It’s best to shop around for EL Insurance from different FCA authorised providers to get the best rate and cover for your business requirements.

Who needs employers’ liability insurance?

If you work self-employed and entirely alone then you do not need employers’ liability insurance. Or, if you only employ immediate family members (such as your children, husband, wife, mother or father) then you do not need EL insurance. If your employees are based abroad you may also not need EL. However, anyone with unrelated employees whether that be two or 200, needs this cover as a legal requirement under UK law.

If your business does not have employers’ liability insurance when it should you can be fined £2,500 for every day you are not covered. You can also be fined £1,000 for not showing your EL Insurance when asked to by an inspector.

How to get employers’ liability insurance in the UK

Getting employers’ liability insurance is usually straightforward. Most business insurance providers in the UK offer it as part of a wider business insurance package that can include public liability, professional indemnity, and business interruption cover. You can buy it directly from an FCA-authorised insurer, through a broker, or as part of a bundle tailored to your industry. Before you buy, make sure you understand what level of cover you need – by law, the minimum is £5 million, but many businesses choose £10 million for extra peace of mind. It’s also worth comparing providers to check what’s included, such as legal expenses, temporary staff, or subcontractors, as policies can vary widely.