UK Guide to Employers Insurance

Employers insurance gives coverage for businesses to meet any costs incurred for compensation and legal fees for injured employees.

This is also known as Employers liability compulsory insurance (ELCI). This type of insurance also covers the business for compensation to employees who become ill at work.

Employees injured while working on the job by some fault of the company including negligence can seek compensation for damages. The NHS can also claim damages from a company and employers insurance will help pay for these costs in this type of situation.

The law states employers must have ELCI and be insured up to £5 million. It is typical for insurance companies to grant employers up to £10 million in insurance coverage. ELCI covers employees who work in England, Scotland, Wales and Northern Ireland.

Employers insurance is not necessary for companies where the employer is the only employee or it only family members are the employees. Limited companies which only employ one person that owns 50 percent of the business do not need employers insurance.

Even for small companies, employers insurance is required. Someone is deemed an employer by law if they control when, where and how someone performs work duties and if the person deducts National Insurance contributions and tax from the salary paid.