How much is UK employers' liability insurance?

What is employers’ liability insurance?

It protects your business in the event a current or former employee successfully sues you for injury or illness suffered as a result of working for you. In these circumstances, your insurance will pay the damages, compensation, and legal fees.

Must I have employers’ liability insurance?

If you employ anyone, you are legally required to have it.

‘Employees’ can include trainees, apprentices, volunteers, part-time staff, and even some sub-contractors.

There are a couple of limited exceptions to this rule: close family members who work for you, and employees based overseas.

If you’re not sure whether someone who works for you is legally an employee, you should check with your insurer, or a professional advisor such as a lawyer or accountant.

How much cover do I need?

The minimum is £5 million in cover. However, many standard policies provide cover up to £10 million.

How is the premium calculated?

Several factors are considered:

The type of work you do

Premiums for the construction industry can be higher than they are for a range of other industries, due to the raised risk of injury or illness to employees.

Business structure

Sole traders normally pay less than a limited company or partnership.

Size of business

The number of employees you have, the size of your operation, and the types of projects you undertake can all influence the cost.

Geographical location

Where your business is based or operates can affect how much you pay, particularly if your business is in a ‘high-risk’ area where there have been many other claims.

Claims history

If you have a poor health and safety record, or have had previous claims made against you, you may find you have to pay more.

How much will I have to pay?

It’s difficult to provide an accurate estimate without knowing more about your business.

However, the average amount for employers' liability insurance in the UK falls between £60 to £300 or more per employee each year.

In the construction industry, a builder with four employees could expect to pay in the region of £800. However, it could end up being less or more.