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Employer's Liability Insurance UK - the basics

Updated: Feb 25

1. What is Employers Liability Insurance?


Employers Liability Insurance is compulsory in the UK for all businesses with Employees. The Employers' Liability (Compulsory Insurance) Act 1969 (legislation.gov.uk) is the piece of law which makes it Compulsory and requires businesses with Employees to maintain Employer's Liability insurance with a minimum limit of liability of £5,000,000.


2. Does my business need Employers Liability Insurance?


It applies to Sole Proprietors, Limited Companies, P:artnerships and Charities and there are extremely limited circumstances in which a Business is not required to have Employers Liability insurance in place:


  • Self employed businesses whose employees are direct relatives (spouses, children, parents, siblings or grandparents)

  • Ltd Companies with a sole director.


3. What are the consequences of not having Employers Liability Insurance ?


If a Business cannot produce evidence of it's Employer's Liability insurance when asked it can be fined up to £2,500 on the spot and £1,000 for each day it remains outstanding.


4. What does Employers Liability Insurance Cover?


If an employee is injured in an accident at work or an Employee contracts an industrial illness they can make a claim for compensation against their Employer if they can demonstrate that the Employer breached their duty of care to that employee.


Employers have a duty of care to their employees to ensure a safe working environment and safe working practices, for example, by providing the following:

  • Provide appropriate and adequate training to help you carry out your job safely.

  • Provide appropriate and suitable equipment to help you perform your duties safely, including PPE where required.

  • Regularly inspect and maintain the work environment and the equipment you use to ensure that it remains safe at all times.

  • Have safe systems of work in place at all times.

This is not an exhaustive list and for further guidance and resources please see the HSE website


It's important to recognise that Employees can be injured at work in circumstances where there is no negligence on the part of the Employer or where the Employee has contributed to circumstances of their accident.


However whether there was negligence or not on the part of the Employer, the Employer remains obliged to pay Statutory Sick Pay (SSP) - GOV.UK (www.gov.uk) which is not recoverable under an Employer's Liability policy. Employers can arrange a Group Personal Accident policy to cover sick pay and provide some compensation to the Employee.


For more information or to obtain quotes for Employers Liability Insurance in the UK contact www.fcinsurancebrokers.co.uk/employers-liability or call 0203 432 0270



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