Glossary · UK
What is Employers' Liability Insurance?
Legally mandatory insurance covering employers against claims from employees injured or made ill as a result of their work, with a minimum cover requirement of £5 million.
Full Definition
Employers' Liability (EL) insurance is a legal requirement for almost all businesses in the UK that employ staff, under the Employers' Liability (Compulsory Insurance) Act 1969. It protects the employer against claims from current or former employees who suffer illness, injury or death as a result of their work or working conditions. The minimum level of cover required by law is £5 million, though most insurers provide cover of £10 million as standard. Businesses that do not hold a valid EL policy can be fined up to £2,500 for each day they are uninsured, and a further fine of up to £1,000 for failing to display the certificate of insurance (or make it available electronically). The EL certificate must state the insurer's name, the employer's name, and the period of insurance. Certain employers are exempt from the compulsory requirement, including businesses that employ only close family members (spouse, civil partner, parent, grandparent, child, grandchild, sibling) if the company is not incorporated, and certain public sector bodies. EL insurance is distinct from Public Liability insurance (which covers claims from members of the public or third parties, not employees) and Professional Indemnity insurance (which covers advice and professional services). Premiums are calculated based on the type of business, the number of employees, the payroll, and the employer's claims history.