Employers’ liability insurance is a legal requirement for UK businesses with staff, covering compensation and legal costs if an employee is injured or becomes ill because of their work.
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If you employ people in the UK, you'll need employers' liability insurance. It's a legal requirement (except for a few specific exceptions). This cover protects you if an employee becomes ill or injured because of the work they do for you, paying for compensation claims and legal costs that could otherwise threaten your business.
Getting the right employers' liability insurance cover means understanding what's legally required, what the policy actually protects you against, and how much you'll pay. This guide walks you through everything you need to know, from the basics of employers' liability insurance requirements in the UK to getting the best employers' liability insurance quote that fits your business.
In simple terms, employers' liability insurance protects your business financially when someone working for you is harmed because of what they do for you.
You need this cover if you're a limited company, partnership, or sole trader and you employ anyone – whether they work full-time, part-time, temporarily, as an apprentice, or even as a labour-only subcontractor in many cases.
The legal framework is strict: UK law requires you to have at least £5 million of cover (though most policies provide £10 million as standard). The Employers' Liability (Compulsory Insurance) Act sets out these requirements, and you must display your employers' liability certificate where employees can easily see it or make it available electronically.
If renewing at higher limits or paying annually puts pressure on your cash flow, flexible funding can help you spread the cost. With options that let you repay early with no fees and only pay interest on the funds you actually use, you can secure the cover you need without tying up working capital.
Yes, if you employ anyone, employers' liability insurance is a legal requirement. The exemptions are extremely limited – for example, some family businesses where all employees are closely related, or companies with only one employee who owns 50% or more of the shares.
If you're in any doubt about whether you need cover, it's worth checking the specifics with an insurance adviser or broker. The penalties for not having cover when you should can be severe, including fines of up to £2,500 for every day you're uninsured.
Sole traders working entirely on their own don't typically need employers' liability insurance. However, as soon as you take on staff – including temps, part-timers, or labour-only subcontractors – you must arrange cover.
Many sole traders assume they don't need it because they're not a limited company, but the law focuses on whether you employ people, not your business structure.
Your policy covers claims from employees who suffer an injury or illness arising from their work.
This includes things like slips and trips on your premises, injuries from manual handling, exposure to harmful substances, or long-term conditions like repetitive strain injuries or occupational asthma.
The insurance pays for legal defence costs, the compensation awarded to the employee, and the claimant's costs (up to your policy limit).
Typical exclusions and conditions matter, though. Policies generally won't cover you if:
You also need to declare your wage roll accurately: underestimating this can lead to problems when you need to claim. It's worth reading your policy wording carefully to understand exactly what's covered and what's not.
Yes, employers' liability insurance generally covers anyone working for you, regardless of their contract type. This includes full-time and part-time employees, temporary and seasonal workers, volunteers, and apprentices.
The position with subcontractors can be more complex: if you use labour-only subcontractors who work under your direction and use your tools or equipment, they may be classed as employees for insurance purposes. Bona fide self-employed contractors with their own insurance are different.
These two types of cover are easily conflated. But they are distinct and protect you against different risks.
Many businesses need both types of cover. If you work on client sites, visit customers' premises, or have any interaction with the public, you'll almost certainly be asked to provide proof of public liability insurance alongside your employers' liability certificate.
Venues and contractors often require both before they'll let you work. The good news is that insurers typically offer combined packages covering both EL and PL, which can be more cost-effective than buying them separately. Some policies also bundle in professional indemnity or property cover, depending on your trade.
The employers' liability insurance cost varies significantly depending on several factors.
Insurers look at your industry and the level of risk involved: a desk-based marketing agency will pay far less than a construction firm, for example. Your wage roll (the total you pay in salaries and wages) and headcount directly affect the premium, as does your claims history. If you've had previous claims, expect to pay more.
Employers' liability premiums can start from a few hundred pounds a year for low-risk businesses with small wage rolls, but can run into thousands for higher-risk trades or larger teams.
Bundling EL with public liability, professional indemnity, or property insurance often reduces the overall cost compared to buying each policy separately.
You can reduce your premiums by demonstrating a strong health and safety culture. Keep detailed risk assessments and method statements (RAMS), maintain training logs and incident reports, and consider getting accredited through schemes like CHAS or SSIP.
Paying annually rather than monthly almost always works out cheaper, too. If the upfront cost is a concern, flexible business funding can help you pay the annual premium while keeping cash available for payroll and day-to-day expenses.
When you request an employers' liability insurance quote, insurers need quite a bit of information to assess the risk and give you an accurate price.
You'll need to provide:
They'll also ask about your health and safety procedures, how you use subcontractors, what level of cover you need, and evidence of certificates or training.
For higher-risk trades (like construction, roofing, or demolition), it's worth using a specialist broker who understands your industry and can access the right insurers. Standard or lower-risk businesses might be able to get competitive quotes online directly from insurers.
Always check that the insurer is registered with the Financial Conduct Authority.
When comparing public liability and employers' liability insurance quotes, make sure you're looking at like-for-like cover. Check the limits, exclusions (especially around work at height, working with heat, or working in confined spaces), territorial and jurisdiction limits, and any endorsements.
Look at the insurer's claims handling service level agreements, too – you want someone who'll support you quickly if you need to make a claim. Confirm that you'll receive an employers' liability certificate that meets legal requirements, as you'll need to show this during compliance checks or when bidding for contracts.
Annual insurance premiums are almost always cheaper than monthly payments, but paying upfront can strain your cash flow – especially if you're also renewing other policies or facing seasonal fluctuations in income. This is where iwoca can help.
Our Flexi-Loan gives you access to flexible funding from £1,000 to £1,000,000. You draw down only what you need, when you need it, and you're only charged interest on the funds you actually use. There are no early repayment fees, so if you want to clear the balance ahead of schedule, you can – saving on interest.
This flexibility means you can take advantage of cheaper annual insurance premiums without locking up the working capital you need for payroll, stock, or growth opportunities.
Whether you're renewing employers’ liability insurance at a higher limit, bundling multiple policies together, or simply want to keep your cash flow healthy while meeting your legal obligations, flexible funding can make the numbers work for you.
Apply for finance with iwoca. It takes a few minutes. Once you’re approved, the money is ready to use in 24 hours. Apply for iwoca funding today.
