Simply Business Employers Liability Insurance UK: Legal Requirements

What employers liability insurance covers

Employers liability insurance covers compensation and legal costs where an employee suffers injury or illness arising from their work and the employer is found legally responsible. This includes accidents at work, injuries caused by faulty equipment, and work-related illnesses that develop over time. The cover exists to ensure that an injured employee can recover compensation even if the cost would otherwise be beyond the means of the business.

When arranged through Simply Business, employers liability is placed with an insurer on the broker's panel and is frequently combined with public liability and other covers in a single SME policy. The policy issues a certificate of employers liability insurance, which is the document an employer must keep available for inspection. The underwriter named on the schedule carries the risk and decides claims, while the broker handles the arrangement.

The legal requirement explained

The obligation comes from the Employers' Liability (Compulsory Insurance) Act 1969, which requires most employers carrying on business in Great Britain to hold employers liability insurance. The legislation sets a minimum cover level of 5m, although many policies are issued at 10m as standard because the marginal cost of the higher limit is usually small. The duty applies broadly, so businesses should not assume they are exempt without checking.

Some narrow exemptions exist, for example certain family businesses employing only close family members, and businesses with no employees such as genuine sole traders. The Health and Safety Executive enforces the requirement and can impose penalties for each day a business operates without the required cover, as well as penalties for failing to display or make the certificate available. Because the rules turn on the precise employment arrangement, employers in any doubt should confirm their position against gov.uk and HSE guidance.

• Source law: Employers' Liability (Compulsory Insurance) Act 1969.
• Minimum cover: 5m, with 10m common in practice.
• Enforcement: Health and Safety Executive, with daily penalties.
• Certificate: must be accessible to employees.

What employers liability does not cover

Employers liability is narrowly focused on injury and illness to employees. It does not cover claims from members of the public or clients, which fall to public liability, nor financial loss arising from professional services, which falls to professional indemnity. Damage to business property is handled by separate property covers.

Within the cover itself, exclusions are set by the underwriter and stated in the wording. These commonly include claims arising from activities or working practices not declared at inception, and obligations the employer has accepted under contract beyond their common-law and statutory duties. Accurate declaration of staff numbers, roles and activities is important, because under-declaration can affect how a claim is handled.

How employers liability performs on complaints

As with all UK insurance, complaint outcomes can be examined through the Financial Ombudsman Service at financial-ombudsman.org.uk, which publishes uphold rates and complaint volumes by firm. General insurance uphold rates have historically sat commonly in the 30 to 40 per cent range sector-wide per FOS data, varying by product and by year. Employers liability claims often involve detailed medical and liability assessment, so readers should consult current figures at the source.

Because Simply Business arranges rather than underwrites, a complaint may concern the sale and administration handled by the broker or a claim decision made by the insurer. Both are within the FOS framework for eligible complainants, following the same eight-week final-response and escalation process.

How to make a claim and escalate disputes

If an employee is injured or becomes ill due to work, the claim should be notified promptly through the route on the policy schedule, which usually points to the underwriting insurer. Maintaining accident records, risk assessments and incident reports supports the assessment and reflects good health-and-safety practice. The insurer manages the response, so employers should avoid admitting liability directly.

If a claim is declined or a service issue arises, the complaints process must produce a final response within eight weeks. Eligible micro-enterprises and individuals can then escalate to the Financial Ombudsman Service free of charge within the applicable time limits.

Frequently asked questions

Is employers liability insurance a legal requirement?

Yes, for most UK businesses that employ staff, under the Employers' Liability (Compulsory Insurance) Act 1969. Some narrow exemptions apply, such as certain family-only businesses and genuine sole traders with no employees.

What is the minimum cover required by law?

The statutory minimum is 5m. Many policies are issued at 10m as standard because the additional cost is usually modest relative to the higher protection.

Who enforces the requirement?

The Health and Safety Executive enforces the obligation. It can impose penalties for each day a business trades without the required cover and for failing to make the certificate available.

Does employers liability cover the public or clients?

No. It covers injury or illness to your own employees. Claims from members of the public or clients fall under public liability insurance instead.

Do I need to display the certificate?

Employers must keep the certificate of employers liability insurance accessible to employees. Records can be kept electronically provided staff can readily access them.

What can I do if a claim is rejected?

Use the insurer or broker complaints process, which must give a final response within eight weeks. Eligible customers can then escalate the matter to the Financial Ombudsman Service free of charge.