Employers' Liability Insurance
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A guide to employers' liability insurance

As your business begins to take off, it is likely you will need to begin hiring employees. However, employing members of staff carries risks and legally you will be required to hold employers' liability insurance. This form of insurance will protect you from employee claims for illness or injury, which is sustained as a result of their employment. This useful guide will give you an overview of employers' liability insurance and advise how you can find the best price.

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

Public liability and employer’s liability are often confused as they seem similar, however they are actually quite different. Public liability insurance will cover your business for third-party claims, whereas employer’s liability insurance covers your employee and ex-employee claims. If you hold public liability insurance, it is important to understand that this will not provide insurance cover for claims made by employees past and present.

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How do I find the cheapest employers liability insurance quote?

If you are looking for cheap employers' liability insurance, it is advisable to compare quotes from a variety of providers. To help you find the cheapest quote, we have partnered with many leading providers of business insurance. Enter your details into our simple online form and our team will find the best quotes from our panel of trusted insurers.

We will need to know details such as the type of business you run, your turnover and the level of cover you require. Your business will need to hold cover of at least £5 million, although most insurers will offer £10 million as a standard amount. If you find that your business does not fit neatly into these standard questions, give us a quick call. Our team will then arrange bespoke quotes from the panel.

It is important that you provide details of the number of staff and the type of roles they have, as this will impact the cost of insurance. For example, you will need to provide the insurer with the exact number of office based and manual staff. If a claim is made and the wrong details have been supplied, your claim may be invalid.

Once you receive your quotes you can compare like for like policies, to find the best policy at the best price. If you decide to purchase the insurance, there will be options to pay the full premium or monthly instalments.

To find out more about arranging competitive employer’s liability insurance, please contact our team. If you are self-employed and are not required to hold employer’s liability insurance, we can help you find other forms of insurance. For example, you may benefit from professional indemnity insurance, cyber insurance or public liability insurance. To find out more, please contact our experienced insurance team today.

Employers liability insurance meaning

Employers liability insurance is one of the main forms of business insurance. If an employee makes a claim as a result of illness or injury sustained during employment, insurance will pay compensation. For example, if an employee suffers from a repetitive strain injury (RSI), they could make a claim against your business. If found liable, the court will order your business to pay compensation to cover costs, damages and the injury. In this situation, your insurance provider will pay the required compensation and any associated legal fees.

Employers liability insurance or EL insurance, as it is also known, is almost always a legal requirement for businesses. If you employ one or more members of staff, you will need to have an employer’s liability insurance policy in place. Even if you have members of staff which are short-term, casual workers, you will still need to hold employer’s liability insurance.

There are some exceptions to this rule, which relate to the employment of close members of your family. However, this only applies if your business is not incorporated as a limited company. In addition, if a sub-contractor provides their own tools and materials and are not working directly under your supervision, they do not need to be covered. If you do not have the required insurance, you could be fined up to £2,500, for each day which your business does not hold a policy.

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Examples of insurance claims

The most common claims result from accidents in the workplace, with industries such as construction and manufacturing considered high risk. Although, it is possible for workers in any type of job to fall ill or suffer an accident. For example, a secretary could claim as a result of developing carpal tunnel syndrome from typing for prolonged periods. Many claims are a result of pro-longed exposure in the workplace environment, such as a chemicals or high levels of noise.

What are the benefits of employer’s liability protection?

The main benefit of employer’s liability insurance is the compensation payments which are paid if an employee sues your business. This compensation will cover damages, medical costs and lost income, resulting from their inability to work. The insurance will also cover legal costs, up to a maximum amount specified in the insurance policy.

This cover will provide your business with peace of mind and protection from potential financial ruin. The costs of an employee claim can quickly rise, with legal costs, medical expenses and compensation payments unaffordable to many businesses.

In recent years, there has been a significant rise in the number of insurance claims. If your business were to have a case brought against it, the amount could easily bankrupt your business.

Employers liability insurance will also protect your business in the future, if an ex-employee decides to make a claim. It is not unusual for occupational illnesses to appear in later years, resulting in claims several years after. To protect your business, it is important that you retain each of your policies as organised records. As an employer you have a duty of care to protect your employees and adequate insurance is a part of this. 

While you should always maintain excellent health and safety practices and minimise risks, insurance will provide your employees with security. Your employees deserve a safe workplace and the comfort of knowing they will be protected if they need to claim.

It is important to remember this form of insurance is a legal requirement for many businesses, rather than an optional policy. Legally, if your business is not required to hold liability insurance, it is still advisable to consider taking out a policy.

How much does employers liability cover cost?

The total cost of your employer’s liability insurance will depend on your exact requirements, such as the cover level you require. As a minimum you will need to have at least £5 million of cover, although many businesses choose a larger level of cover. Other important factors include the type of business you operate and your number of employees.

The insurer will calculate the cost of your insurance based on the cost and likelihood of potential claims. If your employees are working in a hazardous environment, it is likely that you will be paying more in comparison to low-risk employers. It is possible to reduce the cost by making a safe environment for your employees and ensuring they are properly trained.

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