Employers Liability

Employers' Liability Insurance enables businesses to meet the costs of compensation 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. This applies to incidents that occur either on or after 29 January 2007.

By law, an employer must have Employers' Liability Insurance and be insured for at least £5 million. Most insurers automatically provide cover of at least £10 million. Cover should apply to all your employees in England, Scotland, Wales and Northern Ireland.

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 Employers Laibility 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 Employers Laibility Insurance.

The Health & Safety Executive (HSE) is responsible for enforcing the law on ELCI. You can be fined up to £2,500 for each day that you do not have appropriate insurance.