How much does employers’ liability insurance cost?

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Page written by Chris Godfrey. Last reviewed on September 24, 2024. Next review due October 1, 2025.

Premiums for employers’ liability insurance can range from $170 to $250 per month, but just as no two US businesses are alike, so no two business insurance needs are the same. The premium you pay will depend on your business type, the number of people you employ, and the risks attached to what you do or sell.

Although the more employees you have will generally mean paying a higher premium, employers’ liability cover typically costs less per employee when you cover more workers. For example, the cost for one employee may be $200+ per year, but the premium to cover five workers may be $750.

Example costs of insuring one or more employees:

Number of employees	Typical annual premium
One office worker	$60
One worker	$210
Three workers	$350
Five workers	$750

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What is employers' liability insurance?

Employer’s liability (EL) insurance is a type of business insurance that protects you and your employees, (including those who no longer work for you), should they be injured or become unwell as a result of working for your business.

What does employers' liability cover?

Employers’ liability pays the associated legal and compensation costs if one or more of your employees are injured or made sick due to working for your business. It can also cover accidental injury caused by an employee to a third party, such as your customers.

How does employers' liability insurance work?

Employers’ liability insurance covers full-time and part-time employees, any self-employed contractors you hire, temporary staff, interns, apprentices, volunteers, and people taking part in work experience or training schemes. It can also cover your employees if they are working for you remotely or working from their home.

The policy will typically pay for the inured party’s medical expenses, rehabilitation costs, and any compensation and damages costs. It may also cover the claimant’s legal expenses and your own.

Examples of employers’ liability insurance claims:

An employee catches their hand in a machine tool in your factory. They claim for personal injury, loss of income, and long-term disability. Employers’ liability insurance will cover these claims and the legal costs.
An employee accidentally backs a forklift truck into a customer who is visiting your premises. EL will cover the cost of the injured party’s medical bill, any compensation claims and the legal expenses.

Do I need employers' liability insurance?

If your business employs workers other than yourself, then in most cases yes, you do. Employers’ liability insurance is a mandatory legal requirement for most US employers. Your policy must cover you for at least $5 million and come from an authorised insurer. Choosing not to buy EL cover can be expensive. Your business could be fined up to $2,500 for every day you are not properly insured, and you can also be fined $1,000 if you do not display your EL certificate or refuse to make it available to inspectors when they ask.

Who is exempt from employers’ liability insurance?

You may not need employer’s liability insurance if you only employ your spouse, family members, or someone who is based abroad. Sole traders and self-employed who work for themselves and on their own do not usually need employers’ liability insurance.

Top tip: Depending on the nature of the work your business does and the type of risks it presents to your employees, you may need more protection than $5 million. Being under-insured could leave you exposed to catastrophic costs if a major claim is made against your business. If you are not sure how much cover you need, simply contact Swoop today to speak to an expert EL adviser.

Average cost of employers' liability insurance in the US

Swoop’s US customers have access to a variety of providers offering competitive rates. However, premiums will vary according to how many employees are covered, the activities of your business (is it high risk?), and the level of cover you require – a minimum of $5 million.

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

The type of business you operate has a significant impact on the cost of your employer’s liability insurance. Some industries, such as manufacturing, carry more risk of accident, personal injury or even fatality than other sectors such as admin and clerical work. The more the risk your business carries, the higher your premium will be.

Examples of industries with a higher risk of accident and injury:

Construction
Manufacturing
Mining and oil extraction
Commercial fishing
Forestry
Agriculture

How business structure affects employers' liability costs

As well as risk and the number of employees covered, many insurers will also calculate your premium based on the structure of your business – sole trader, partnership, or limited company. Although sole traders who work on their own do not usually require employer’s liability cover, those that do employ others will typically pay less per covered worker than a partnership. In turn, a partnership will usually buy their EL cover at a lower cost per employee than a limited company.

Other factors that can impact employers’ liability costs

Location – when insurers have a history of more claims than normal in a given location, they may charge more for businesses that are based in that area.
Your claims history – if you have had previous employers’ liability claims against your business, insurers may consider your organisation as a higher risk. This will typically increase the cost of your EL cover.
Customer base – who you sell to and where you sell may also influence your premium. For example, if you run a road haulage business that often delivers to construction sites, your drivers may be more at risk of injury. This would usually increase the cost of your EL cover.

In short, many factors can impact how much your employers’ liability cover costs – which is why it makes good business sense to get comparison quotes before buying your policy.

How Swoop can help

All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let an accident or oversight become a catastrophe for your business. Contact Swoop today to compare top-quality employers’ liability cover from different providers and to discuss all your business insurance needs.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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