How much does employers’ liability insurance cost per employee?
Who needs employers’ liability insurance?
Any business that employs someone must have employers’ liability insurance.
All employees must be covered. This includes part-time staff, volunteers, trainees, and some sub-contractors.
There are a couple of limited exceptions to this rule: may include close family members who work for you, and employees based overseas.
If you’re unsure whether someone who works for you should be counted as an employee, check with your insurer.
Is the premium based on how many employees I have?
Your premium will be based on several factors. In addition to the number of employees, an insurer will consider:
- the type of work you do
- the size of your business
- your geographical location
- your business structure (e.g. sole trader, partnership or limited company)
Broadly speaking:
- A sole trader will pay less than a partnership or limited company.
- The higher the risk and more employees you have, the more you will pay.
Sometimes you can reduce the cost of your premium by showing a positive and proactive approach towards health and safety at work, or because you have a good claims record.
How much cover do I need?
You must have a minimum of £5 million in cover. Many insurance companies offer £10 million as standard.
If you don’t have the minimum amount of cover you can be fined by authorities – up to £2,500 a day.
How much will it cost per employee?
The cost will vary depending on the unique circumstances of your business. This could range from around £60 per year for employees in low-risk professions, up to £300 for employees in high-risk occupations, such as electricians or builders.
It should be noted that these are broad ‘industry’ averages and may not necessarily reflect the amount you end up paying. Ultimately, the cost of your premium will be calculated based specifically on your business and the risk it presents.
If you work in a high-risk industry and employ multiple people, it won’t necessarily mean the cost per person will be the same. For each subsequent employee, the cost may be reduced slightly.
For example, whereas the initial employee added to a policy may cost £200 per annum, the fifth employee may cost £160.