How Much Does Employers’ Liability Insurance Cost?
Employers’ liability insurance has been legally required in the United Kingdom since 1969, and at least £5 million worth of cover should be obtained. Although this seems to be a lot for the minimum value, especially when compared to other types of insurance, it makes sense when considering what it covers. From medical expenses to lost income to legal fees, the annual premium for a single worker can be as low as £61, proving how beneficial is it to obtain.
However, how much does it cost depending on the type of business you run?
Employers’ Liability Insurance: High Coverage and High Cost
For one employee working a dangerous job, employers’ liability insurance can exceed over £300 annually. This is aimed at dangerous jobs like construction workers because they are riskier to insure from an insurance company’s perspective. Workers often spend all day at the project site, exposed to hazardous chemicals and using plants like excavators and bulldozers, increasing the chance of a bodily injury.
As a result, the premium is much more expensive because the payout is more likely to be costlier too, and the premium must reflect that.
Other occupations which may need a more expensive policy are workers that drive a large portion of their day. Couriers are the most famous example of this, planning a long route for the day which stops each destination that they must deliver a parcel to. Car accidents are among the dearest accidents to cover due to the severe bodily trauma they could cause, and being in a vehicle for a large portion of your workday increases this risk.
Taxi and Uber drivers have a similar risk and should also opt for a policy that covers these injuries; however, commercial auto insurance should be opted for instead for the expenses of repairing the vehicle. £10 million worth of insurance would be reasonable to ensure any medical treatment expenses and lost income are easily covered.
Employers’ Liability Insurance: Medium Coverage and Medium Cost
If you do not necessarily work in a job with a high likelihood of physical injuries, having a high coverage policy may be a waste of money. For example, small businesses that do not yet have a developed customer base and overflowing profits may struggle to pay the premium for every worker, so costs can be decreased by lowering the coverage.
The average quote for one worker in a reasonably sized business with no significant risk is £213 per year, and it decreases as more workers are hired. Whilst this is enough to ensure employees for any fatal accidents they may be involved in, it would not cover frequent claims and continuous injuries, which is not likely for a job like this anyway. Such professions may include teachers, shopkeepers, hair salon owners, and event planners.
There is still a moderate chance of being hurt due to interacting with customers and moving around, but not so much that it would happen consistently.
Employers’ Liability Insurance: Low Coverage and Low Cost
Cheap employers’ liability insurance can be as low as £50 per year per worker, in occupations where time is spent mainly in an office at a desk, with little to no physical interaction with clients or moving from one place to another. For example, insuring an employee who works in customer service and spends the day on the phone resolving technical issues can get insured for £56.
This is sufficient coverage to have security and peace of mind whilst working. In the same way, any other employee having these low risks like a receptionist, data entry associate, or administration clerk should look for £5 million worth of coverage, the minimum legally allowed.
Does it Cost the Same to Insure Each Employee?
With employers’ liability insurance, every employee may have the same job roles and responsibilities, but as more are insured, the premium costs for each decrease. Company directors are responsible for obtaining this cover, and when applying, they must state how many workers they hire. Although the more employees a business has, the higher the quote will be, it is not necessarily as high as it seems.
For example, the first employee a hair salon employs may cost £180 to insure, but when the second is hired, the premium for both of them is £280. When there are three employees, the premium could be £350. This demonstrates that as more employees are hired, the lower the costs become to insure them individually.
Employers’ Liability Insurance – To Conclude
Generally speaking, employers’ liability insurance varies from £50 to £300 per employee, depending on the size of the company and the relative risk of the industry in which they are involved.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Professionals Insurance
Project Manager Insurance
Property Manager Insurance
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