Business Insurance : Liability Insurance

What is employers' liability insurance?

Employers' liability insurance offers you protection in the event that one of your employees is accidentally injured due to negligence at work and responds by launching legal action against you.

It’s one of the most common business insurances in the UK and required by law if you employ at least one member of staff. As a consequence there are few exemptions to employers liability insurance meaning your company and even your personal assets could be at risk if you fail to take out cover.

Do I need employers' liability insurance?

If you hire one or more employees in the UK, you’re required by law (under the Employers’ Liability Compulsory Insurance Act 1969) to have employers’ liability insurance in place. 

Failure to comply can result in your business being fined up to £2,500 per day for each day you operate without employers’ liability cover.

Who does the employers' liability insurance cover?

Employers’ liability covers you against claims for compensation made by your employees, if they get injured whilst performing their role and decide to take legal action. It will also cover the cost of your legal fees for defending the claim should the matter go to court.

Types of claims covered under employers’ liability cover include slips and falls, for instance as a result of an unsigned wet floor or improperly stored boxes, as well as sicknesses and injuries sustained because of faulty equipment or machinery. This covers scenarios such as a baker burning his or her hand because they haven’t been supplied with oven gloves, or a welder sustaining an eye injury because they’ve had to work without protective safety goggles.

How much does employers' liability insurance cost?

At Bluedrop we uniquely tailor our employers’ liability cover to our clients’ businesses to ensure the correct level of financial support is in place should you need it.

Our employers’ liability insurance cost depends on the size and nature of your business, as well as the number of employees working for your organisation. To calculate your premium, our brokers will ask you a few simple questions about your business to determine where the key risks to your organisation lie. Armed with this knowledge, we’re then able to determine precisely how much cover you should take out in order to be fully protected from the cost of future compensation claims and all associated legal bills.

What businesses are exempt from employers’ liability insurance?

You need to take out employer’s liability insurance if you employ one or more employees. The only exemptions to this are:

• If you’re the only employee of a limited company

Employers’ liability insurance also isn’t needed if you’re the sole employee of a limited company. The only exception to this exemption is if you employ any relatives to work with you, in which case employers’ liability insurance would be required by law.

• If you only hire boni-fide subcontractors

Hiring boni-fide subcontractors also exempts you from having to take out employers’ liability insurance. So long as the contractor is registered as self-employed with HMRC and doesn’t get paid by your company using PAYE, nor receive any other company benefits such as paid annual leave, they’re technically not an employee of your business and employers’ liability cover doesn’t apply. A boni-fide contractor means that they don’t work under your direction or use your tools and materials and are employed to do a separate trade to you.

What is the employers’ liability insurance certificate?

An employers’ liability insurance certificate is a policy document provided by the insurer underwriting your insurance. Among other things, the certificate details key policy features such as the cover start date and cover level (the maximum amount to which you are insured).

To comply with UK law, your employers’ liability insurance certificate must be prominently displayed or made available to all employees in electronic format.

Why choose Bluedrop Insurance?

Bluedrop’s extensive experience and expertise means you can be assured that your business will be protected against employee claims for accident, sickness, or injury, up to the level that matches your needs.

Our brokers will invest time in getting to know your business, identifying where the biggest risks to your operation lie so we can offer you a tailored quote that delivers the ideal threshold of cover for your workforce.

Don’t risk a fine or further legal action, leaving your business vulnerable. Use our online quote checker today or call our expert employers’ liability brokers and put the steps in place to protect your business.

FAQ:

Do I need insurance if I hire contractors?

So long as the contractors are boni-fide subcontractors, according to HMRC’s definition, then you do not need to take out employers’ liability insurance.

Do I need employer’s liability insurance if self-employed?

If you’re self-employed and you don’t employ any employees you do not need employers’ liability insurance. The same applies if you are the sole employee of a limited company. However, if you do employ staff then your will need employer’s liability insurance.

What is the difference between public and employer’s liability insurance?

The difference between public and employers’ liability insurance is actually very simple. Employers’ liability insurance protects you against claims made for injury sustained by your employees at work, for which you are deemed negligent. Public liability covers you if a member of the public gets injured or has their property damaged by you (or an employee of your business) due to negligence in your registered workplace, in their (the client’s) own home, or in a public place.

Do I need employers’ liability insurance for a limited company?

Yes, you will need employers’ liability insurance if you run a limited company. The only exemption is if you’re the company’s sole employee, in which case the insurance isn’t required.

Do I need employers' liability insurance for volunteers?

Yes, volunteers need to be covered by an employers’ liability insurance policy. If you have an existing policy, you will need to let your insurer know if you take on volunteers. If you don’t have a policy in place, you will need to arrange cover in order to avoid a daily fine.