Employers’ Liability Insurance for Electrical Manufacturing Businesses (UK): A Practical Guide

Introduction

If you run an electrical manufacturing business, you’re balancing tight production schedules with real-world risks: soldering fumes, rotating machinery, manual handling, high-voltage testing, and busy warehouse areas with forklifts and pallets. Even with strong health and safety controls, accidents and work-related illness can happen.

Employers’ Liability (EL) Insurance is designed to protect your business if an employee (or someone treated as an employee) claims they were injured or became ill because of their work for you. In the UK, it’s also a legal requirement for most businesses that employ staff.

This guide explains what EL insurance is, why it matters specifically for electrical manufacturing, what insurers look for, and how to buy the right cover without paying for things you don’t need.

What is Employers’ Liability insurance?

Employers’ liability insurance covers your legal liability if an employee is injured or becomes ill due to their employment and you are found negligent (or you settle a claim). It typically covers:

• Compensation awarded to the employee (or their family)
• Claimant legal costs
• Your legal defence costs
• Some associated expenses (depending on the policy)

It’s different from Public Liability (PL) insurance, which covers injury to members of the public or damage to third-party property. EL is about your people.

Is Employers’ Liability insurance a legal requirement for electrical manufacturers?

In most cases, yes. Under the Employers’ Liability (Compulsory Insurance) Act 1969, UK businesses must have EL cover if they employ people.

Most policies provide at least £10 million of cover, even though the legal minimum is typically £5 million. Insurers often include £10 million as standard because serious injury claims can be substantial.

Who counts as an employee?

This is where manufacturers can get caught out. EL may be required not only for PAYE employees, but also for:

• Apprentices and trainees
• Temporary workers and agency staff (depending on contract and control)
• Labour-only subcontractors
• Casual workers
• Some volunteers

If you control how, when, and where someone works, insurers may treat them as an employee for EL purposes.

When might EL not be required?

Some limited exemptions exist (for example, certain family-only businesses), but they’re narrow and easy to misunderstand. If you’re unsure, it’s safer to assume EL is required and get advice.

Why electrical manufacturing has higher EL exposure

Electrical manufacturing combines industrial hazards with technical processes. Insurers know that the risk profile is not the same as a low-risk office business.

Common EL claim drivers in electrical manufacturing include:

• Manual handling injuries (lifting reels, transformers, enclosures, pallets)
• Slips, trips and falls (cables, packaging, oil, wet floors, uneven surfaces)
• Machinery accidents (presses, cutters, CNC, conveyors, winding machines)
• Burns and thermal injuries (soldering stations, heat guns, reflow ovens)
• Fume and dust exposure (solder fumes, flux, cleaning solvents, resins)
• Noise-induced hearing loss (compressors, presses, extraction systems)
• Hand-arm vibration (power tools, grinders)
• Eye injuries (swarf, splashes, solder spatter)
• Electrical shock during testing, rework, or maintenance
• Forklift and warehouse incidents

A key point: EL claims don’t always come from “big” accidents. Many are repetitive strain, long-term exposure, or “near miss” situations that become injuries over time.

What Employers’ Liability insurance typically covers

While wording varies by insurer, EL policies for manufacturers commonly include:

1) Injury and illness claims

If an employee alleges your business failed in its duty of care, EL can respond. Examples:

• A technician develops occupational asthma linked to solder fumes and inadequate extraction
• A warehouse operative suffers a back injury after repeated heavy lifting without suitable training or aids
• A maintenance engineer is injured by an unguarded moving part

2) Legal defence and investigation costs

Even if you believe you did everything right, you may need legal support to defend a claim. EL typically includes defence costs.

3) Court awards and settlements

If you are found liable, EL can pay compensation and claimant costs, up to the policy limit.

4) Some policy extensions

Depending on the insurer and your trade, you may see extensions such as:

• Indemnity to principals (important if you work on client sites)
• Unsatisfied court judgments
• Health and safety prosecution costs (often limited and subject to conditions)
• Corporate manslaughter defence costs (again, limited and conditional)

Always check what’s included and what has a sub-limit.

What EL insurance does not cover (common exclusions)

Employers’ liability is broad, but it is not “everything”. Common exclusions or limitations include:

• Deliberate or fraudulent acts
• Fines and penalties (many are uninsurable)
• Known circumstances before the policy start date
• Certain pollution exposures (may be limited)
• Work outside the declared business activities
• Claims arising from asbestos (often excluded)

Also, EL won’t replace good safety management. Insurers expect you to comply with UK health and safety law and maintain reasonable controls.

How much EL cover do electrical manufacturers need?

Most UK electrical manufacturers buy £10 million as standard. In some cases, you may consider higher limits, for example if:

• You have a large workforce
• You operate multiple shifts and high-output lines
• You use heavy machinery or high-energy testing
• You have a history of claims
• You work on client sites with contract requirements

The right limit is part risk assessment, part contract compliance.

What affects the cost of Employers’ Liability insurance?

Insurers price EL based on your people risk and your controls. Typical rating factors include:

• Payroll split by employee type (production, warehouse, office, field)
• Number of employees and use of temps/labour-only
• Claims history (frequency and severity)
• Nature of manufacturing (assembly vs heavy fabrication)
• Machinery types and guarding standards
• Manual handling exposure and use of lifting aids
• Dust/fume extraction and air monitoring
• Training records (induction, refreshers, toolbox talks)
• PPE policy and enforcement
• Health and safety management system (risk assessments, audits)
• Housekeeping and traffic management (forklifts/pedestrians)
• Use of contractors for maintenance and electrical work

A practical tip: insurers like clear documentation. If you can show your controls, you often get better terms.

Key risk controls insurers expect in electrical manufacturing

If you want competitive EL premiums, focus on the basics and prove you do them.

Risk assessments and method statements

• Up-to-date risk assessments for each area and process
• COSHH assessments for chemicals, flux, solvents, cleaning agents
• Documented safe systems of work for machinery and testing

Machinery safety

• Guarding on moving parts
• Emergency stops tested and recorded
• Lockout/tagout procedures for maintenance
• Planned preventative maintenance logs

Fume and dust control

• Local exhaust ventilation (LEV) where needed
• LEV testing and certification on schedule
• Training on correct use of extraction

Manual handling

• Training tailored to real tasks (not generic tick-box)
• Lifting aids (hoists, pallet trucks, trolleys)
• Job rotation where repetitive strain is a risk

Electrical safety

• Clear procedures for high-voltage testing
• Competence checks for staff doing electrical work
• PAT where appropriate and fixed installation checks

Workplace transport

• Segregated pedestrian routes
• Forklift training and refresher training
• Speed limits and loading bay controls

Incident reporting

• Near-miss reporting culture
• Investigation process that leads to improvements
• RIDDOR reporting where required

EL vs other insurance policies electrical manufacturers often need

EL is only one part of a sensible insurance programme. Depending on your operations, you may also need:

• Public Liability insurance (visitors, deliveries, third-party injury/damage)
• Product Liability insurance (faulty components causing damage/injury)
• Product Recall (for certain products and supply chains)
• Professional Indemnity (if you design, specify, or advise)
• Commercial Property insurance (buildings, stock, plant, machinery)
• Business Interruption (loss of income after insured damage)
• Cyber Insurance (ransomware, data breaches, operational disruption)
• Directors’ & Officers’ liability (management decisions)

If you manufacture components used in safety-critical environments, product liability and recall become especially important.

Common mistakes when buying EL insurance

Electrical manufacturers often run into problems because of avoidable admin issues.

• Under-declaring labour-only subcontractors or temps
• Not splitting payroll correctly between office and shop floor
• Not disclosing key processes (e.g., high-voltage testing, solvents, resin casting)
• Letting the policy lapse or failing to display the EL certificate
• Assuming PL covers employee injuries

A good broker will ask the right questions upfront so the cover matches your real operations.

What to prepare before you request a quote

To get accurate terms quickly, gather:

• Total payroll and split by role
• Headcount and use of agency staff
• Description of products and processes
• Details of machinery and safety controls
• Claims history (usually 3–5 years)
• Copies of risk assessments, COSHH, and training records (if requested)
• Any contract requirements for limits

The clearer you are, the fewer follow-up questions you’ll get and the more confident the insurer will be.

How claims typically unfold (and how to protect your position)

If an incident happens:

1. Make the area safe and provide first aid
2. Record the incident promptly (who, what, where, when)
3. Preserve evidence (photos, CCTV, equipment condition)
4. Get witness statements while memories are fresh
5. Notify your insurer/broker early, even if you think it’s minor
6. Review controls and document improvements

Early notification matters. Delays can complicate defence and increase costs.

Employers’ Liability for apprentices and young workers

Electrical manufacturing often relies on apprentices. Young and inexperienced workers can face higher risk because they are still learning.

Insurers will expect:

• Proper supervision
• Training plans and competency sign-off
• Restrictions on high-risk tasks until trained
• Clear PPE and safety briefings

If you can show a structured apprenticeship programme, it can actually help your risk profile.

Employers’ Liability for multi-site and contract work

If your team installs, tests, or commissions equipment at client sites, check:

• Territorial limits (UK vs overseas work)
• Indemnity to principal clauses
• Whether your EL responds while staff are on-site
• Any contract wording that increases your liability

This is common for electrical manufacturers that also provide on-site support.

Choosing an insurer: what “good” looks like

Price matters, but so does claims handling. For manufacturers, look for:

• Experience with industrial and engineering risks
• Clear policy wording and sensible endorsements
• Strong claims support and legal panel
• Flexibility for growth (new lines, new sites, new processes)

A cheap policy that doesn’t fit your operations can become expensive later.

FAQs: Employers’ Liability insurance for electrical manufacturing

Do I need EL insurance if I only have one employee?

Usually, yes. The legal requirement is based on employing people, not company size.

Does EL cover agency workers?

It depends on the contract and who controls the work. If you supervise and direct them day-to-day, they may be treated as your employees for EL.

Is EL required for directors?

Directors are often covered if they are also employees under a contract of service. The details matter.

What limit do clients typically ask for?

£10 million is common in UK contracts, but some larger organisations may request higher.

Does EL cover stress and mental health claims?

Some policies can respond to certain work-related stress claims, but these are complex and depend on circumstances and wording.

What happens if I don’t have EL insurance?

You can face enforcement action and significant fines, and you may have to pay claims and legal costs yourself.

Next steps: get the right EL cover for your manufacturing business

Employers’ liability insurance is not just a box-ticking exercise for electrical manufacturers. It’s a core protection for your business, your leadership team, and your ability to keep operating if something goes wrong.

If you want a quote that reflects your real risk (and avoids nasty surprises at claim time), speak to a broker who understands manufacturing, can present your controls properly, and can structure your cover alongside public liability, products liability, property, and business interruption.

Need help reviewing your current cover or arranging Employers’ Liability insurance for an electrical manufacturing business? Call Insure24 on 0330 127 2333 or request a callback via our website.