Employers' Liability Insurance Calculator

Employers' Liability insurance is a legal requirement for virtually all UK businesses with at least one employee, under the Employers' Liability (Compulsory Insurance) Act 1969. It covers compensation claims from employees injured or made ill through their work. The minimum cover the law demands is £5 million, although most policies on the market provide £10 million. Non-compliance is expensive rather than merely awkward, with fines reaching £2,500 per day for trading without a valid policy.

A narrow set of employers sits outside the duty. An unincorporated family business is exempt if every employee is a close relative, but the exemption does not apply once the family business is incorporated as a limited company. A company whose only employee is its owner, holding 50% or more of the issued share capital, is also exempt, as are most public bodies such as government departments, local authorities and NHS bodies. Other employers are caught from the first member of staff, whatever the size of the payroll or whether the business is making money, so the duty starts the day someone joins.

The cover responds to claims from employees, and from former employees, who suffer injury, illness or death as a result of their work. That takes in accidents on site and occupational diseases that only surface years later, such as repetitive strain injury, asbestos-related illness and hearing loss caused by noise exposure. What it does not touch is anyone outside the payroll. A customer who slips in reception or a passer-by hurt by falling material is a public liability matter, which is a separate policy bought alongside this one.

Premiums are usually set as a percentage of annual payroll, adjusted by sector risk, so the wage bill you enter is the figure doing most of the work. The calculator uses indicative rates of 0.35% of payroll for office and professional work, 0.6% for retail, 0.8% for hospitality, 1.5% for manufacturing and 2.5% for construction. Because the base is the wage bill, the premium rises with headcount and with pay awards rather than sitting still year to year.

Insurers also price in your claims history and safety record, which can move the rate as much as the sector label does. The calculator does not adjust for either, and the figures produced here are indicative only. Real premiums are underwritten individually and depend on full disclosure of what the business actually does, the roles employees perform, past claims and the risk management measures already in place. Understating any of that to win a cheaper quote tends to surface at the point of claim, which is the worst possible moment to find the policy does not match the work being done.