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Employers liability insurance

If you have been running your own business and are planning to expand by taking on employees for the first time you must ensure that you get Employers’ Liability Insurance (ELI). If you are only intending to employ a family member or you are going to be employing someone working overseas you may not need to take out ELI but take advice on this from a reputable broker.

The policy you get must come from an authorised insurer and cover you for least £5m. Having ELI as an employer is not optional and there is a stiff daily fine if you are not properly insured. ELI will help you pay compensation if one or more of your employees is injured or becomes ill because of the work they do for you. Remember that no matter how careful you are, workplace injuries can still happen. It’s not just accidents – your employees could be entitled to sue you if they develop a repetitive strain injury or chronic illness from their work. Compensation payments can be huge, and even if you win the case, you’ll still have to pay expensive legal fees. But with good ELI, this is all taken care of by your insurer – helping protect you from extra costs.

Once you’ve got your cover, the Employers’ Liability Insurance certificate must be prominently displayed in your workplace and should be shown on request in the event of any Health & Safety inspection visit. Again, a financial penalty can be levied if you don’t display or make the Certificate available for inspection. It is recommended that businesses use the services of an insurance broker authorised by the Financial Conduct Authority. A broker will be able to help you choose the most appropriate insurance cover for you.

Employers Liability Insurance FAQs

Below are some of the most frequently asked questions we receive on this topic from PayStream clients:

Not necessarily. If they are genuinely self-employed, they will have their own insurance cover. Remember though that you may still have a duty of care for everyone engaged and visiting your workplace and there are different types of insurance to cover this risk.

No. This is one of the exemptions contained in the law and also applies to other family members.

This is highly unlikely. The two types of insurance are very different. Speak to your insurer to confirm exactly what your professional indemnity insurance policy includes and excludes.

Yes, you would also need ELI. Third Party Insurance is likely to cover different risks. Although it is common to find bundles of business insurance offered, each constituent policy will be independent and relevant for specified business risks. Your insurance broker will advise you.

Yes and this is a common way of purchasing insurance today. Although you can buy direct through an online provider it may give you greater peace of mind to go through an accredited broker who understands your business.

No on two counts. If you have an overseas agent, he or she is unlikely to be an employee and secondly, if they were an employee, as they are resident and working abroad they are covered by the UK exemption. However, if they are employees, you are likely to be involved in some similar insurance requirements set by the German authorities. 

£5 million. You are likely to find that good policies will provide a higher level of cover for little more. Again, an authorised insurance broker should tailor the policy to your needs.

You could make the certificate available at any location such as your registered business address; on your business website or even providing your employee with a copy. Certificates don’t contain confidential information but give insurer details, duration and level of cover.

Probably. But it will depend upon the terms of the cover and the role (as a director or employee of your company) in which you were working on behalf of your business. You would need to look at the policy or consult your insurer or broker to understand exactly how you stand.

You should determine this after talking with your broker or financial adviser.

Please be aware that PayStream is not authorised to give insurance advice but we recommend you consult an accredited broker, insurer or financial adviser to secure the best offering for your business. 


Employers Liability Insurance is an essential part of any business which engages staff. It is often packaged together with other business insurances which we cover in separate articles on PayStream’s Help Hub.

Read about comprehensive insurance here
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