Employers' liability insurance

Compulsory insurance covering claims from employees injured or made ill by their work.

What it means

Employers' liability insurance covers your liability to employees for injury or illness caused by their work. It is compulsory for almost all employers, with a statutory minimum level of cover.

The certificate must be accessible to employees.

Why it matters

It is one of the few insurances required by law, and the penalty for not having it is charged per day of non-compliance.

It is distinct from public liability, which covers third parties, and from professional indemnity, which covers advice and services.

What it looks like in practice

Required as soon as you employ anyone, with narrow exemptions — some family businesses and some single-employee companies where that employee owns most of the shares.

Keep certificates for past years. Industrial disease claims can arrive decades later and the relevant insurer is the one on risk at the time.

Volunteers and some contractors may count as employees for this purpose depending on the arrangement.

What to watch out for

Assuming a contractor's own insurance covers you. Check the actual arrangement and who is directing the work.

Under-declaring your wage roll, which can void the cover when it is needed.

Where to get proper advice

The Health and Safety Executive's guidance sets out who needs it. A broker for the cover itself.