Employers' Liability

The GOV.UK website states that you must get Employer's Liability (EL) insurance as soon as you become an employer - your policy must cover you for at least £5 million and come from an authorised insurer. It is becoming increasingly complex as to whether or not a person or company employs another person. Issuing a contract of employment is no longer entirely necessary for you to be an employer. MRSL Enterprise can help you to understand the rules on this.

Employer's liability insurance is there to protect you and your business against compensation costs, should an employee suffer an illness or injury as a result of their employment with you. This is the one insurance of the three highlighted here which is required by statute.

Often Employer's Liability insurance is purchased as a component of a Commercial Combined Insurance package that covers all of the property and liability risks of a small business.

In Empolyers' Liability Insurance required by law?

The GOV.UK website states that you must get Employer's Liability (EL) insurance as soon as you become an employer - your policy must cover you for at least £5 million and come from an authorised insurer.

What it is to 'become an employer' is detailed. Broadly, and the details must be checked, any company will need Employers' Liability insurance. There are a few exceptions for companies that are principally owned and operated by one individual. These are effectively sole traders in a company. Sole traders do not need Employers' Liability unless they employ anyone. Simply hiring someone on a contract does not mean that they are not an employee. There are a number of detailed tests to prevent employers from simply issuing a contract to bypass employment rights.

Who should buy Employers' Liability Insurance

Any company with employees should buy Employers' Liability Insurance. Under recent changes, Directors, even Non-Executive Directors are considered to be employees. If you are a company, or if you do employ anyone, even on an ad-hoc contract basis then it is worth considering Employers' Liability Insurance.

How much does Employers' Liability Insurance cost?

A small, office based business can buy Employers' Liability Insurance for around £100, especially when it is part of a package of insurances that might also include Professional Indemnity Insurance and Public Liability Insurance

As the number of employees rises and if your employees do manual work then the cost rises. Machinery and dangerous machinery, welding etc. increases the cost. The height and depth (underwater) at which employees might work is another significant risk factor. Height is measured from the floor - so painting in a tower block, or even working on the roof of a tower block might not be work at a large height.