Discover the most frequently asked Business Insurance questions

How is employers’ liability insurance calculated?

The cost of the premiums for employers’ liability insurance is calculated according to several relatively simple patterns.


The key notion to understand is book rating. Books rating is calculated according to a base rate. The base rate is in turn calculated based on the estimate made by the insurer concerning the level of risk linked with a business or industry. Particulars of the company are only then taken into account.

Elements such as claims history, perceived importance of risk, and actions endeavoured by the company to illustrate sensibility to risk are key to understand how employers’ liability insurance is calculated. Finally, the number of employees and the numbers on the general payroll as naturally taken into account to evaluate the price of this business insurance policy.


This goes to say that there are several ways to lower the price of employers’ liability insurance. Basically, the price of an employers’ liability insurance is calculated more favourably for the business if a rational risk management policy has been undertaken. A safer working environment, awareness campaigns and trainings aimed at improving security, but also, a history of low numbers of claim will lower the risk attached to a business and therefore, the price of the premiums.

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But one of the most important elements which will affect the way the price of an employers’ liability insurance is calculated is naturally the amount of the coverage needed. Employer are required by law to be insured for a minimum £5 million worth of employers liability insurance. But many insurers will not provide a policy covering less than £10 million. 

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