Employers’ Liability Insurance Explained

At Acer Insurance, we understand that much of the success of your business depends on the well-being of your employees. As an employer in the United Kingdom, it is a legal requirement to ensure you have Employers’ Liability Insurance in place and to have consideration for the safety and health of your workforce. 

Today, we will explore what Employers’ Liability Insurance is, why it’s important, and how it can protect both your business and your employees.


Understanding Employers’ Liability Insurance

Employers’ Liability Insurance is a specialised policy designed to address claims made by employees who have suffered job-related injuries or illnesses. In the United Kingdom, it’s a legal obligation. As soon as you become an employer, you must obtain Employers’ Liability Insurance, regardless of how they are paid, casual workers and PAYE are treated in the same way and your policy must provide coverage of at least £5 million, the majority of policies offer up to £10 million.


Why is Employers’ Liability Insurance Important?

  1. Legal Requirement: Under the Employers’ Liability (Compulsory Insurance) Act 1969, nearly all businesses in the UK are required to have Employers Liability Insurance. Failing to comply with this legal requirement can result in fines of up to £2,500 per day.
  2. Protection for Employees: Employers Liability Insurance ensures that your employees are financially protected if they are injured or become ill due to their work. It covers medical expenses, lost wages, and rehabilitation costs, providing peace of mind to your workforce.
  3. Protection for Your Business: Without Employers Liability Insurance, your business could face significant financial losses if you have to pay compensation claims out of your own pocket. Employers Liability Insurance protects your business assets and helps you preserve financial stability.
  4. Legal Costs: Employers Liability Insurance covers the legal costs associated with defending against employee claims. This often includes legal representation and court fees.


How Employers’ Liability Insurance Works

Employers’ Liability Insurance complements your other general liability insurance. It provides an additional layer of financial protection for your business in the event of a claim by an employee.

Typically, Employers Liability Insurance is purchased as part of a package or combined insurance and covers medical expenses, death benefits, and partial lost wages due to work-related injuries, and it protects the business from claims for additional damages and compensation.


What Employers’ Liability Insurance Covers

Employers Liability Insurance claims can come from accidents caused by faulty machinery, manual handling accidents, occupational diseases such as dermatitis, respiratory diseases such as mesothelioma or mental health disorders, and claims can be made by an employee, family members or by another third party.


How Much Employers’ Liability Insurance Do You Need?

The minimum required coverage under the law is £5 million, but it’s essential to assess your business’s specific needs and risks. Some industries or businesses with higher inherent risks may opt for higher coverage to ensure adequate protection.

The cost of your insurance policy will depend on factors such as how many people you employ and the nature of your work. Premiums are often higher in high-risk professions where employees work in more dangerous situations.


Do You Need Employment Practices Liability Insurance and Employers’ Liability Insurance Covers?

Employers’ Liability Insurance does not cover employee claims alleging discrimination, wrongful termination, or other employment-related issues. For this kind of coverage, you would need Employment Practices Liability Insurance. While Employment Practices Liability Insurance  is not legally required, it provides crucial protection against costly employee claims.


At Acer Insurance, we understand that navigating the complexities of insurance can be daunting. Employers’ Liability Insurance is not just a legal requirement; it’s a fundamental way to protect your business and employees. 

The cost of not having Employers’ Liability Insurance can be substantial, both financially and in terms of damage to your business’s reputation. We encourage you to reach out to us for a free quote and to discuss your specific requirements. Let us help you protect your business and your employees with the right insurance coverage. Your peace of mind is our priority.


This blog post is intended to provide general information about Employers’ Liability Insurance. For specific advice and insurance options, please consult with a qualified insurance professional.


  • Oliver Burt

    Oliver Burt is a Director at Acer Insurance Services and founded the company in 2019, he specialises in company development and bespoke schemes for those with unusual and nonstandard insurance needs.
    Before founding Acer Insurance Services, Oliver was the Operations Manager at a small insurance broker in Sevenoaks where he was responsible for the day to day running of the business. Oliver has many years’ experience having worked within the insurance industry since 1996.
    Oliver is passionate about finding niche insurances that can make a real difference to people and businesses, finding solutions tailored to their insurance needs. He also is committed to developing the skills and knowledge of the team at Acer Insurance Services.
    In his spare time Oliver enjoys growing fruit and vegetables on his allotment and spending time with friends and family.