Employer Liability Insurance: What It Is and Why It Matters

Quick Summary

• Under the Employers' Liability (Compulsory Insurance) Act 1969, almost all UK employers are legally required to hold employers' liability insurance, with a minimum of £5 million cover
• This insurance exists specifically to compensate employees injured because of their employer's negligence — it isn't optional, and operating without it is a criminal offence
• Because compensation is paid by the insurer, not the employer directly, pursuing a genuine claim doesn't come out of your employer's own pocket or threaten the business's ordinary finances
• If your employer can't confirm their insurer, the Employers' Liability Tracing Office can help identify the correct insurance policy, even years after the event

What is employers' liability insurance?

Employers' liability insurance is compulsory cover that virtually every UK employer with at least one employee must hold, under the Employers' Liability (Compulsory Insurance) Act 1969. It exists to ensure that if an employee is injured or made ill because of their employer's negligence, there's a funded insurance policy in place to pay the resulting compensation — rather than that cost falling on the business itself, or the employee having no way to recover what they're owed.

How much cover must employers have?

Employers are legally required to hold a minimum of £5 million of employers' liability cover, though many businesses hold considerably more. This minimum is designed to be sufficient to cover the great majority of workplace injury claims, including serious and long-term injury cases.

Is having this insurance actually compulsory?

Yes. With very limited exceptions (such as certain small family businesses employing only close relatives), it's a criminal offence for an employer to operate without employers' liability insurance. Employers are also required to display a valid certificate of insurance, whether physically in the workplace or made available to staff.

Does this mean my claim will bankrupt my employer or get someone fired?

No, and this is one of the most common — and understandable — worries people have before pursuing a claim. Because employers' liability insurance exists specifically for this purpose, a successful claim is paid by the insurer, not out of the employer's own operating funds. Insurance premiums are priced to account for this. Pursuing a legitimate claim doesn't threaten the business's survival or your job security through the claims process itself.

What if my employer says they don't have this insurance, or won't confirm who their insurer is?

This happens more often than you might expect, particularly with older claims or businesses that have changed hands. If your employer can't or won't confirm their insurer, your solicitor can use the Employers' Liability Tracing Office (ELTO), a database specifically set up to help trace employers' liability policies, sometimes going back decades. This is one of several reasons why pursuing a claim with specialist legal support matters — locating the right insurer isn't always straightforward, but it's rarely a dead end.

What if my employer has gone out of business since my accident?

This doesn't necessarily prevent a claim. Because your claim is effectively against the employer's insurance policy rather than the business's current assets, a claim can often still proceed against the insurer even if the employer itself has since ceased trading, provided the accident occurred while a valid policy was in place.

Does this insurance cover every kind of workplace injury?

It covers injury and illness caused by the employer's negligence or breach of statutory duty in the course of employment — which is the basis on which the great majority of accident at work claims proceed. Your solicitor will assess whether your specific circumstances fall within this.

Frequently asked questions

Will my employer know I've made a claim against their insurance?

Employers are generally aware when a claim is made, since it involves their insurer, but this is a routine, expected part of running a business with employees — it isn't unusual or something employers aren't prepared for.

Can my employer refuse to let me claim because it will affect their insurance premium?

No — your right to claim compensation for a genuine workplace injury caused by your employer's negligence isn't something your employer can refuse or block, regardless of any effect on future premiums.

What if I'm not sure whether my employer even had this insurance at the time of my accident?

This is exactly the kind of detail a solicitor can investigate on your behalf, including via the Employers' Liability Tracing Office if needed — you don't need to already know the answer before starting a claim.

Worried about how a claim might affect your employer or your job?

Understanding how employers' liability insurance works is often the first reassurance people need before starting a claim.

Free case assessment

Or call 01228 272395 to speak to Edward & Amaury Solicitors (SRA number: 800525). No upfront cost and nothing to pay if your claim does not succeed.