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Employers’ liability insurance

Our business insurance experts can help you arrange comprehensive employers' liability cover, ensuring your business stays compliant and your workforce remains protected.

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Employers’ liability

Introduction Who needs this cover?What does it cover?Why Premierline?Speak to an expert Get Quotes

Employers’ liability insurance is a legal requirement for almost all UK businesses that employ staff. It is a vital type of business insurance, designed to protect your business against the financial impact of compensation claims if an employee is injured or falls ill as a result of their work for you.

What is employers’ liability insurance?

Employers’ liability insurance helps cover the cost of compensation and legal fees if an employee sues your business for a work-related injury or illness. In the UK, most businesses with one or more employees are legally required to have at least £5 million of employers’ liability coverage, though many policies offer £10 million as standard.

According to data from the Health and Safety Executive (HSE), there were 680,000 injuries in the workplace in 2024/25. While workplace safety is always the priority, accidents can happen in any environment, from a busy construction site to a quiet retail shop. Employers’ liability insurance provides a vital safety net, ensuring that your business can meet its legal and financial obligations to its staff.

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Who needs employers’ liability insurance?

If you have people working for you, you almost certainly need this cover. This applies whether you are a large corporation or a small business with just one assistant. The definition of an “employee” for insurance purposes is broad and can include:

Full-time and part-time staff
Contractors and sub-contractors
Temporary or seasonal workers
Students on work placements or apprenticeships
Volunteers

Is employers’ liability insurance a legal requirement?

Yes, for the vast majority of UK businesses, employers’ liability insurance is compulsory under the Employers’ Liability (Compulsory Insurance) Act 1969. If you employ anyone – including full-time, part-time, temporary, or seasonal workers – you must have a valid policy in place from an authorised insurer.

Failure to have adequate cover can result in significant fines. The Health and Safety Executive can fine a business up to £2,500 for every day it is without insurance. Additionally, you can be fined £1,000 if you do not display your certificate of insurance or refuse to make it available to inspectors when asked.

Why would a company be exempt from employers’ liability insurance?

There are very few exceptions to this legal requirement. You may be exempt if:

You are a sole trader and do not employ anyone.
Your business is a family-run company that only employs close family members (provided it is not a limited company).
You only employ people who are based abroad.

However, navigating these exemptions can be tricky. Even if you believe you are exempt, it is often wise to speak to a specialist insurance broker to ensure you are not inadvertently breaking the law.

What does employers’ liability insurance cover?

A standard employers’ liability policy is designed to handle the full scope of a claim, allowing you to focus on running your business while experts handle the legalities.

HSE statistics for 2024/25 underscore the importance of this protection, showing that 40.1 million working days were lost due to work-related illness and workplace injury, a sharp increase from the previous year.

Furthermore, data from the Compensation Recovery Unit (CRU) shows that while claim volumes have fluctuated, employers’ liability claims remain a constant risk for UK businesses, with tens of thousands of cases notified annually. Protecting against these risks is about more than just compliance; it is about ensuring the long-term financial stability and continuity of your business.

Compensation payments

If your business is found liable for an employee’s injury or illness, the policy covers the settlement or award granted to the employee.

Legal defence costs

Whether the claim is successful or not, the policy covers the solicitor fees and court costs required to defend your business.

Medical costs

In some cases, the policy can cover the costs associated with an employee's medical treatment or rehabilitation.

Common risks and sector examples

Different industries face different challenges, but the need for protection is universal:

Construction and trades

From scaffolders' insurance to general contractor insurance, this cover is vital for risks such as falls from height and injuries from heavy machinery.

Hair and beauty

In a hairdresser's or salon, employees may develop dermatitis from chemicals or suffer slips and trips on wet floors.

Hospitality and retail

In food and drink or retail settings, burns, cuts, and lifting injuries are common workplace risks.

Care and medical

Care and medical insurance packages must include cover for staff who may suffer back injuries from manual handling or face risks while visiting clients.

What is not covered by employers' liability insurance?

While this cover is essential for employee-related claims, it does not protect against other common business risks. To ensure your business isn’t left vulnerable to underinsurance, you should consider a wider package that includes:

Public liability

Protects against claims from members of the public, rather than staff.

Public liability insurance

Product liability

For injuries or damage caused by products you have sold or supplied. Learn more in our guide: What is liability insurance?

Product liability insurance

Professional indemnity

For claims of professional negligence or bad advice.

Professional indemnity insurance

Cyber and data insurance

To protect against the fallout of data breaches or hacking.

Cyber and data insurance

How much does employers' liability insurance cost?

The cost of your policy is determined by your unique risk profile, with insurers assessing factors such as your industry type, annual turnover, and claims history. Generally, higher-risk sectors like construction may expect to pay more than office-based businesses, while your total number of employees and previous history of workplace accidents will also directly influence your premium.

Because every business is unique, there is no one-size-fits-all price for employers’ liability insurance. Instead of providing generic estimates, Premierline’s experts work to understand your specific operations and build a tailored insurance package. This approach ensures you have the correct level of cover for your workforce at a competitive price that reflects your actual risk.

Why choose Premierline as your insurance broker?

Choosing the right insurance can be complex, but it doesn’t have to be. Premierline acts as your trusted partner, helping you navigate the market to find the best protection for your SME.

Our dedicated team is here to take the stress out of insurance. Whether you are hiring your first employee or managing a growing workforce, we provide the expert guidance needed to ensure your business is fully protected and legally compliant.

Access to leading insurers We work with a panel of the UK's top insurance providers to offer you a wide choice of covers.

Tailored for SMEs Our experts understand the unique challenges faced by small businesses and shops.

UK based experts Speak to our knowledgeable advisors who can explain complex terms in plain English.

Efficient service We save you time and effort by doing the legwork for you.

Employers' liability insurance FAQs

Is employers liability insurance compulsory?

Yes, it is a legal requirement for most businesses with employees in the UK.

What is the minimum level of employer's liability insurance?

Legally, you must have at least £5 million of cover, though £10 million is the standard offering for many policies to ensure adequate protection against large claims.

Do I need employers’ liability insurance as a sole trader?

If you work entirely by yourself, you do not need it. However, the moment you hire an assistant, take on a temporary worker, or bring in an apprentice, you are legally required to take out a policy.

Do I need employers’ liability insurance for self-employed workers?

This depends on the nature of your relationship with the worker. If you provide their tools, control where and how they work, and they cannot hire a substitute, they may be classified as an employee for insurance purposes, even if they are “self-employed” for tax reasons.

Do you need employers’ liability insurance for volunteers?

Generally, yes. While volunteers are not paid, you still have a duty of care towards them. Including them in your employers’ liability policy is the best way to protect both them and your business.

What happens if I don’t have employers’ liability insurance?

You can face heavy daily fines from the HSE, and your business would be responsible for paying any compensation and legal costs out of its own pocket, which could lead to financial ruin.

Can I combine employers’ liability with other covers?

Absolutely. In fact, most businesses choose to bundle it with public liability, legal protection, and product liability for comprehensive protection.

Speak to an employers’ liability insurance expert

We’re committed to finding the right insurance solutions for your business to let you work without worry and focus on what really matters – your business. To find out more about Employers’ Liability insurance, call Premierline today or arrange a call back to speak to an insurance advisor.