Average Cost of Employers' Liability Insurance 2020

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Is Employers' Liability Insurance Really That Expensive?

The average cost of employers' liability insurance ranges from around £61/year for a single office worker up to £213 or more for a trade worker for a small to medium-sized business in the UK, with premiums rising with the number of employees—it's one of the most expensive types of business insurance.

But while employers' liability insurance seems expensive, it's required by law in most cases and protects against employee injury or illness claims. Read our in-depth guide to get a feel for the market before you buy a policy so you're well informed about pricing in the UK market.

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Average Cost of Employers' Liability Insurance in the UK

The average cost of employers' liability insurance in the UK starts from around £61 and rises with the number of employees covered, the riskiness of the work they do and other factors.

For example, while cover for an employee who only does office work costs around £61, you'd spend closer to £213 on average for employers' liability insurance for one worker who performs tasks associated with your main line of business. This is because office work is usually pretty low risk, so administrative staff are less prone to workplace-related accidents or illnesses compared to other employees, especially those with physical tasks.

Average Cost of Employers' Liability Insurance in the UK
1 office worker£61
1 employee£213
2 employees£354
5 employees£753

Generally speaking, the more employees you have, the higher your employers' liability insurance premium. However, each additional employee typically costs less to insure compared to previous employees you've added to your cover.

For example, the first employee costs on average £213 to insure, but the second costs an additional £141. By the time you have 5 employees on the roster, the 3rd, 4th and 5th cost around £133 on average, with the additional premium dropping for each one.

Chart showing the cost of employers liability insurance for small businesses in the UK

While employers' liability insurance can seem expensive, regardless of the size of your business, the cost of workplace injuries and illnesses to a business can be significant.

How does your line of business affect employers' liability insurance costs?

Insurance companies base employers' liability insurance quotes on the type of work you carry out. The higher the risk of injury or illness to your employees, the higher the insurance rates. For example, EL premiums are typically higher for a builder than for a caterer. A builder would pay on average £1,072 to cover 5 employees, which is 2X as much as a catering business would pay.

Average Cost of Employers' Liability Insurance by trade1 office worker1 employee2 employees5 employees
Lower risk (e.g., caterer)£52£183£232£526
Moderate risk (e.g. cleaner)£51£179£289£663
Higher risk (e.g., builder)£81£278£541£1,072
Chart showing the cost of employers liability insurance for different types of businesses by risk in the UK

However those rates will vary depending on many factors including the business structure (e.g., sole trader/self employed, partnership or limited company).

How Business Structure Affects Employers' Liability Costs

Most insurance companies also base their employers' liability insurance rates on your business structure—that is, sole trader, partnership or limited company. Sole traders (the self employed) typically pay the least for employers' liability insurance—they also pay the least for public liability insurance.

For example, the cost of employers' liability insurance for a partnership is around 16% more than for a sole trader. A limited company (with one director) would typically pay 30% more for employers' liability than a sole trader.

Average Cost of Employers' Liability Insurance by structure1 office worker1 employee2 employees5 employees
Sole Trader£24£179£305£685
Limited Company (1 director)£107£244£392£841
Chart showing the cost of public liability insurance for small businesses in the UK

Other risks that affect the cost

Each business will have unique attributes and risk factors that an insurance company takes into account when calculating a quote for employers' liability cover. For example, gardening maintenance companies that carry out tree felling will pay more for employers' liability cover than businesses that only carry out on-the-ground residential garden tidies.

In addition, your location can have a bearing on your employers' liability insurance premiums. If an insurance company has had a history of more EL claims in one area, they are likely to charge more for cover if that's where you operate. Also, the size of your business can be a factor, as can the types of customers you work for if you have a B2B company.

Overall, there are many factors that can influence your business insurance rates, but hopefully this will help you understand how your rates are calculated by your insurer, whether you're buying employers' liability insurance for the first time or are researching costs ahead of a renewal.


To determine the average cost of employers' liability insurance for a small company in the UK, our study involved gathering hundreds of quotes for basic employers' liability insurance, which includes the mandatory £5 million minimum cover dictated by law.

We first chose a few popular small businesses to represent different levels of risk to employees (caterer, cleaner and builder) then gathered quotes for different business structures: a sole trader, a partnership and a limited company with 1 director.

Typically, employers' liability insurance is bought together with public liability cover. To determine average prices for employers' liability, we gathered quotes for each scenario (across different business structures, risk levels and number of employees) for the combination of public liability and employers' liability insurance, then we subtracted out the cost of public liability insurance alone (assuming no employees). This enabled us to find the additional business insurance cost attributed to employers' liability cover.

Therefore the figures in this study reflect basic employers' liability cover only, without any cover for public liability, tools, stock, legal cover, personal accident cover, etc. (coverages that many companies will choose to buy in addition to employers' liability cover).

For each situation (e.g., a self-employed caterer with 2 employees) we took the average of the 5 cheapest quotes we found.

Insurance quotes can vary significantly from business to business, from insurer to insurer, and even from day to day, so you may find the cost to buy employers' liability insurance is significantly lower or higher than the figures mentioned in this study. Please use the data presented here for educational purposes only.

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