Guide

Liability insurance

Employers' liability insurance

Employers' liability (EL) insurance enables businesses to meet the costs of damages and legal fees for employees who are injured or made ill at work through the fault of the employer. Employees injured due to an employer's negligence can seek compensation even if the business goes into liquidation or receivership.

The NHS can also claim the costs of hospital treatment - including ambulance costs - when personal injury compensation is paid.

By law, an employer must have EL insurance and be insured for at least £5 million. Most insurers automatically provide cover of at least £10 million.

If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory EL insurance. Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company, are also exempt from compulsory EL insurance.

The Health and Safety Executive for Northern Ireland (HSENI) is responsible for enforcing the law on EL insurance. You can be fined up to £2,500 for each day that you do not have appropriate insurance.  Read HSENI's employers liability insurance guide for employers.

Useful checks

Your policy must be issued by an authorised insurer otherwise it will not be valid and you risk breaking the law. Check if an insurance provider is a member of the Association of British Insurers.

Displaying your EL compulsory insurance certificate and HSENI inspections

When you take out a policy you will receive a certificate of employers' liability compulsory insurance.

You must display a copy of this document where employees can easily read it. You can display it either:

  • as a paper copy, eg as a photocopy pinned to a notice board
  • electronically, eg as a page on your intranet or as a document in a shared folder on your network

You also need to make these certificates available to health and safety inspectors on request.

If you do not display your EL compulsory insurance certificate or refuse to make it available to HSENI inspectors when they ask, you can be fined up to £1,000.