Is Employers’ Liability Insurance a legal requirement?
Employers’ liability (EL) insurance is required by law as soon as you become an employer.* Your policy must cover you for at least £5 million and come from an authorised insurer, however, you may choose a policy with a higher limit.
*You may not need EL insurance if you only employ a family member or someone who is based abroad.
Some professional bodies, regulators and even clients may require a minimum level of professional indemnity insurance before they’ll consider working with you, so as a minimum you’ll need to at least match this level.
Check to see if your insurer is authorised by looking at the Financial Conduct Authority register or contact the Financial Conduct Authority.
How much cover do I need?
To comply with the law businesses usually need a minimum cover level of £5 million, however, most insurers offer a higher level of cover than the minimum requirements, usually around £10 million.
Typically, insurers have set criteria and set packages for EL insurance, therefore, you don’t generally have to choose a level of cover.
Some insurers offer discounts on multiple insurance policies which can bring down the cost. For example, combining Employers’ Liability Insurance with Public Liability & Professional Indemnity Insurance may save you money compared to purchasing individually.
Who does Employers’ Liability Insurance cover?
Employers’ liability insurance is designed to protect current and ex-employees, however, the term “employee” can include more than those directly employed. For example, the following people may be classed as employees:
- Sub-contractors
- Part-time staff
- Staff on zero-hour contracts
- Temporary staff
- Work experience students
- Anyone on work placement
- Volunteers
How much does Employers’ Liability Insurance cost?
The total cost of employers’ liability insurance costs will largely depend on the number of employees within the business. The nature of your business is also an important factor in calculating a quote; if there are more risks involved, such as working in a dangerous environment or with hazardous materials, it’s likely that you will pay a higher premium.
Another important factor to consider is choosing the right provider for your business insurance. The overall cost can vary dramatically between providers, even for the same or similar levels of cover, so it’s always worth comparing a number of providers to ensure you get the best deal.
Start comparing Employers’ Liability quotes for your business now.
