Is employer’s liability insurance compulsory?
Yes, if your business employs anyone—whether full-time, part-time, temporary, or freelance—you’re legally required to have employer’s liability insurance. The minimum legal cover in the UK is £5 million, though most insurers offer £10 million as standard. This insurance protects you if an employee becomes injured or ill because of their work. It covers legal fees and compensation if a claim is made against you. Failing to have this insurance can result in fines of up to £2,500 per day. Even if you only hire staff occasionally or on a casual basis, you’re still responsible for their health and safety. Some exceptions apply, such as for family-run businesses with only close relatives employed, but most companies will require cover. Having this policy not only fulfils legal obligations but also shows you value the wellbeing of your team.
Do I need to cover temporary or freelance workers?
Yes, in most cases, you need to cover temporary, freelance, or casual workers under your employer’s liability insurance. Even if they’re not on your payroll, you’re still responsible for their safety while they’re working for you. If they’re under your direction or using your equipment, then legally, they’re treated as employees in this context. This includes interns, volunteers, work experience placements, and subcontractors who are under your control. It’s important to declare all types of workers to your broker or insurer so your policy reflects your true workforce. Failing to disclose them can invalidate your insurance and leave you exposed if a claim arises. Keeping records of contracts, roles, and responsibilities also helps clarify cover requirements. A tailored policy ensures you’re fully protected across all working arrangements.
What happens if an employee makes a claim against me?
If an employee claims that your business caused them injury or illness, they may take legal action. This could relate to a workplace accident, repetitive strain injury, or a mental health issue arising from stress. Your employer’s liability insurance will cover legal defence costs and any compensation awarded if you’re found liable. You’ll need to provide incident records, risk assessments, and any relevant training or safety documentation. A claims investigator may assess your procedures. If your insurer agrees the claim is valid, they’ll manage settlement and communications. It’s essential to report the incident as soon as possible and not admit fault before consulting your insurer. Even if the claim is unfounded, your policy will defend you against it. Having proper documentation and a culture of safety makes defending claims easier and protects your business from long-term reputational and financial damage.
Can I get cover for workplace injury claims?
Yes, employer’s liability insurance specifically covers claims for workplace injuries or illness. This includes incidents like slips, trips, machinery accidents, lifting injuries, and even long-term conditions such as repetitive strain injury or industrial hearing loss. The policy covers compensation payments, legal costs, and sometimes rehabilitation expenses. It applies whether the injury happens on your premises, on a worksite, or during travel related to work. You must have proper health and safety procedures, training records, and risk assessments in place—these will be reviewed during the claims process. If you’re found negligent, the insurer will handle the financial consequences. Even in well-run businesses, accidents happen, so this cover is essential to protect your finances and reputation. Having clear reporting procedures and incident logs in place also helps ensure smooth claims handling.
Does insurance cover staff travelling for work?
Yes, many policies include cover for employees who travel for work, especially if travel is a regular part of their role. Employer’s liability insurance still applies while staff are working off-site, including client visits, events, or remote job sites. If your employees travel abroad, you may need to add business travel insurance to your policy. This can cover medical expenses, delays, lost equipment, and emergency repatriation. For employees driving for work, make sure they’re covered under a business motor insurance policy, as standard personal vehicle insurance usually won’t apply. It’s important to inform your broker of the nature and frequency of travel so they can recommend the right level of cover. Proper documentation and travel risk assessments also help support your responsibilities as an employer and ensure insurance applies effectively.
What’s the best policy for remote workers?
For remote workers, your employer’s liability insurance still applies, as they’re considered employees regardless of location. However, you may need to update your policy to reflect that staff work from home. It’s also advisable to extend your business contents insurance to cover equipment used off-site, such as laptops or printers. If employees use their own devices, cyber insurance becomes important to manage data security risks. Employers remain responsible for health and safety, even in home working environments, so conducting remote risk assessments is recommended. Encouraging safe workstation setup and regular breaks can reduce the risk of claims related to posture or strain. A broker can help ensure your policy reflects the modern workplace and keeps you compliant and protected across all working environments.
Is mental health-related absence covered under employee policies?
Mental health issues are increasingly recognised in workplace insurance. Employer’s liability insurance may cover claims where a mental health condition results from a proven failure in workplace practices—such as excessive stress, bullying, or lack of support. However, this only applies if the employee can show that the business was legally liable for the harm. For broader support, businesses often turn to group income protection, employee assistance programmes (EAPs), or private health insurance. These provide proactive mental health support, counselling, and cover for extended absences. While not legally required, offering such benefits can reduce absence rates and show you’re committed to employee wellbeing. Speak with your broker about policies that support both legal protection and preventative care, especially in high-pressure roles or industries.
Can I include legal expenses insurance with liability cover?
Yes, many business insurance policies allow you to include legal expenses insurance as an add-on or within a package. This covers the cost of legal advice, representation, and court fees if you’re involved in a dispute with an employee, customer, supplier, or regulatory body. It can also cover employment tribunals, tax investigations, or contract disputes. When combined with employer’s liability or public liability cover, it provides a more comprehensive risk management strategy. Legal expenses cover is typically affordable and can save your business thousands in unexpected costs. It also gives you access to legal helplines and resources that help prevent problems before they escalate. If you operate in a regulated industry or have frequent contractual relationships, this cover is highly recommended.
How do I make sure I’m fully compliant with UK laws?
To ensure compliance with UK laws regarding insurance and employment, start by reviewing whether you’re legally required to have employer’s liability insurance (usually the case if you employ anyone). Display your insurance certificate where staff can see it, as this is a legal requirement. Carry out regular risk assessments, keep records of training and incidents, and follow Health and Safety Executive (HSE) guidelines. Check your contracts for clauses that may require specific covers, such as public or professional liability. It’s also crucial to notify your broker of any changes in business structure, staffing, or activities. Non-compliance can lead to hefty fines, invalid insurance, or legal action. A good broker will help you stay on top of regulatory requirements and ensure your policies are always up to date.
