How to secure employer's liability insurance

If you hire even one person, you are legally required to have Employer's Liability (EL) insurance with at least £5 million of cover. This insurance protects your business by covering compensation costs if an employee becomes ill or is injured as a result of the work they do for you. Getting it is a straightforward and essential step in growing your team.

Who needs this insurance?

It’s not just for businesses with full-time, permanent staff. The legal requirement is broad and covers almost anyone who works for you. You will need EL insurance if you hire:

• Full-time or part-time employees.
• Temporary staff or casual workers.
• Apprentices or volunteers.
• Some contractors, if you control their work and provide the equipment (this is often called 'labour-only' subcontracting).

Good to know: The main exception is if you run a limited company where you are the sole employee and own 50% or more of the shares. You are also exempt if you only employ very close family members. However, always check the latest rules on the GOV.UK website if you are unsure.

How to get your policy in 3 steps

Getting covered is a relatively quick process. Here’s how to do it:

1. Gather your information: Insurers will need to know your business activities, the number of people you employ, and the type of work they will be doing. The riskier the work (e.g., construction vs. office admin), the more the insurance will cost.
2. Shop around for quotes: You can get EL insurance from most major business insurers. The easiest way to compare prices is by using an online comparison site for business insurance or by speaking to an independent insurance broker who can find the best deal for you.
3. Purchase and display your certificate: Once you’ve chosen a policy, you can usually buy it online instantly. You will be issued with an EL insurance certificate. You are legally required to display this certificate where your staff can easily see it. A digital copy on a shared company intranet or notice board is perfectly acceptable.

Important things to remember

• Minimum Cover: While the legal minimum is £5 million, you’ll find that most insurers offer £10 million as their standard level of cover.
• Fines are serious: The Health and Safety Executive (HSE) can fine you up to £2,500 for every day you are not properly insured. You can also be fined £1,000 for not displaying your certificate.
• Keep records: You must keep copies of your past EL insurance certificates for at least 40 years, as some work-related illnesses can take a long time to develop.