Employers’ Liability Insurance for Garment Factories (UK Guide)

Introduction: why garment factories face higher EL risk

Garment manufacturing is hands-on, fast-paced, and often seasonal. You may have cutting tables running all day, pressing and steaming stations, dyes and chemicals, packing lines, forklifts, and a mix of permanent staff, temps, apprentices, and agency workers.

That combination increases the chance of workplace injury or illness. Employers’ Liability (EL) Insurance is the policy designed to protect your business if an employee (or someone treated as an employee) claims you caused their injury or ill health.

In the UK, EL is also a legal requirement for most employers. If you run a garment factory, it’s one of the first covers you should put in place.

What Employers’ Liability Insurance covers (in plain English)

Employers’ Liability Insurance covers your legal liability if an employee is injured or becomes ill because of their work for you.

Typical EL cover includes:

• Compensation awarded to the employee (or their family)
• Claimant legal costs
• Your legal defence costs
• Settlements agreed out of court

It can respond to both sudden accidents (e.g., a hand injury from a cutting machine) and long-tail illnesses (e.g., dermatitis or respiratory issues from repeated exposure).

EL is not the same as Public Liability (PL). PL is for injury to members of the public or damage to third-party property. EL is for your workforce.

Is Employers’ Liability Insurance legally required for garment factories?

In most cases, yes.

Under the Employers’ Liability (Compulsory Insurance) Act 1969, most UK employers must have EL insurance with a minimum cover of £5 million (though many insurers provide £10 million as standard).

Who counts as an “employee” for EL purposes?

This is where garment factories need to be careful. EL isn’t only for people on your payroll.

You may need EL if you have:

• Full-time and part-time employees
• Temporary staff and seasonal workers
• Apprentices and trainees
• Casual labour
• Labour-only subcontractors
• Some agency workers (depending on contract and control)

A simple rule of thumb: if you direct and control someone’s work, and they’re working for your business, you should assume EL is relevant.

Common exemptions (and why they rarely apply to factories)

There are limited exemptions, such as if you employ only close family members in an unincorporated business. In practice, most garment factories have broader staffing and will not qualify.

If you’re unsure, treat EL as compulsory and get advice. The penalties for getting it wrong can be serious.

What level of cover should a garment factory buy?

The legal minimum is £5 million, but most garment factories choose £10 million.

Reasons factories often opt for higher limits:

• Multiple-injury incidents (e.g., fire, chemical exposure, machinery incident)
• Higher wage claims and long-term disability costs
• Legal costs can be substantial even for defended claims
• Contract requirements from retailers, landlords, or logistics partners

If you supply major retailers or operate in larger premises with higher headcount, £10 million is typically the sensible baseline.

Typical Employers’ Liability claims in garment manufacturing

Every factory is different, but the same themes appear again and again.

1) Machinery and cutting injuries

Examples include:

• Lacerations from cutting machines or rotary cutters
• Crush injuries from presses
• Entanglement injuries from moving parts

Claims often focus on guarding, training, lock-off procedures, and maintenance records.

2) Slips, trips and falls

Garment factories can have:

• Offcuts on the floor
• Loose cables
• Wet areas near dyeing/cleaning
• Congested walkways in packing zones

Even “minor” falls can lead to back injuries and extended time off.

3) Manual handling and repetitive strain

Common issues include:

• Lifting fabric rolls
• Moving boxes of finished goods
• Repetitive sewing/finishing work
• Prolonged standing at benches

These claims can be costly because they may involve long-term pain, reduced capacity, or time away from work.

4) Respiratory issues and dust exposure

Depending on materials and processes, risks can include:

• Fabric dust
• Chemical fumes from solvents, adhesives, dyes, and cleaning agents
• Poor ventilation in pressing/steaming areas

Claims may develop over time, which makes documentation and risk controls crucial.

5) Dermatitis and skin conditions

Frequent handwashing, contact with chemicals, and certain fabrics can lead to dermatitis. EL claims may allege inadequate PPE, poor COSHH controls, or lack of training.

6) Noise and hearing loss

If you have noisy machinery, prolonged exposure can lead to hearing damage. Noise assessments and hearing protection policies matter.

7) Forklift and workplace transport incidents

Where forklifts, pallet trucks, or loading bays are involved, EL claims can arise from collisions, crush injuries, and poor segregation between pedestrians and vehicles.

What insurers look at when pricing EL for garment factories

EL premiums are not random. Insurers are trying to estimate how likely a claim is, and how expensive it could be.

Expect questions about:

• Number of employees and total wage roll
• Split of clerical vs manual work
• Use of temps, agency staff, and subcontractors
• Processes: cutting, sewing, pressing, dyeing, printing, finishing
• Machinery types, guarding, and maintenance schedule
• COSHH assessments and chemical storage
• Fire safety measures and evacuation procedures
• Accident history and RIDDOR reportable incidents
• Training records and supervision
• Risk assessments and method statements

The clearer and more organised your answers, the easier it is to place cover on good terms.

Key compliance and safety basics (and how they link to claims)

Insurance is not a replacement for safety. But good safety reduces incidents and can reduce premiums.

Health and Safety at Work etc. Act 1974

This underpins your duty to protect employees and others affected by your work.

Risk assessments

A written risk assessment is a practical document, not a box-ticking exercise. For garment factories, it should cover machinery, manual handling, chemicals, fire, and workplace transport.

COSHH (Control of Substances Hazardous to Health)

If you use dyes, solvents, adhesives, cleaning chemicals, or sprays, COSHH assessments are essential. Insurers may ask for evidence.

Training and supervision

Many EL claims become expensive because the injured person alleges they were not trained, not supervised, or were pressured to work unsafely.

Keep records of:

• Induction training
• Machine-specific training
• Refresher training
• Toolbox talks
• PPE issue logs

Maintenance and inspection

Documented maintenance is one of the best defences in an EL claim. If guarding was missing or a machine was faulty, insurers will want to see what you did to prevent it.

EL vs other covers garment factories often need

EL is vital, but it’s rarely enough on its own.

Common companion covers include:

• Public Liability: visitors, contractors, delivery drivers
• Products Liability: if your garments cause injury (e.g., faulty fasteners, flammability issues, allergens in materials)
• Property Insurance: buildings, stock, machinery
• Business Interruption: loss of income after insured damage
• Employers’ Liability extension for overseas travel (if staff travel)
• Legal Expenses: HR disputes and employment tribunals (separate from EL injury claims)

A tailored Commercial Combined policy often bundles these together.

Common pitfalls that can invalidate cover or cause disputes

Most EL claims are straightforward, but problems arise when the policy doesn’t match reality.

Watch out for:

• Understating wage roll or headcount (including temps)
• Misdescribing your processes (e.g., dyeing/printing not disclosed)
• Not declaring labour-only subcontractors
• Failing to report incidents promptly
• Poor documentation (training, maintenance, risk assessments)

If your factory changes (new machinery, new processes, new premises), tell your broker/insurer.

How to reduce Employers’ Liability premiums (without cutting corners)

Insurers reward well-managed risk. Practical steps include:

1. Improve housekeeping: clear walkways, manage offcuts, cable management.
2. Machine guarding and lock-off: documented checks, clear procedures.
3. Manual handling controls: trolleys, team lifts, training, job rotation.
4. Ventilation and extraction: especially for dust, fumes, and pressing areas.
5. PPE policy: issue logs, enforcement, replacements.
6. Accident reporting culture: near-miss reporting, quick corrective actions.
7. Forklift segregation: marked routes, speed limits, trained operators.
8. Regular audits: internal inspections with actions tracked.

Even small improvements can make a measurable difference over a renewal cycle.

What information you’ll need to get a quote

To get accurate EL terms, have these ready:

• Total number of employees and annual wage roll
• Split of manual vs clerical staff
• Use of temps, agency workers, and subcontractors
• Description of processes and machinery
• Any hazardous substances used (and COSHH controls)
• Claims and incident history (ideally 3–5 years)
• Health & safety documentation (risk assessments, training, maintenance)

If you can supply this in one clear summary, you’ll usually get faster and better outcomes.

FAQs: Employers’ Liability Insurance for garment factories

Do I need EL insurance if I only employ temps or seasonal staff?

Usually yes. If they work under your direction and control, they can bring a claim against you.

Does EL cover agency workers?

It depends on the contract and who controls the work. Many factories still need to treat agency staff as part of their EL exposure.

Is EL the same as Employers’ Liability for contractors?

If you use bona fide subcontractors with their own insurance and control over their work, the position can differ. But labour-only subcontractors can be treated like employees.

What happens if I don’t have EL insurance?

You can face fines and enforcement action. More importantly, a claim could be financially devastating.

How quickly should I report an incident?

As soon as practical. Early reporting helps insurers investigate, preserve evidence, and manage costs.

Can an employee claim years after they worked for me?

Yes. Some conditions develop over time. This is why keeping EL certificates and records matters.

Conclusion: get the basics right, then build better protection

For UK garment factories, Employers’ Liability Insurance is both a legal requirement and a key financial safeguard. The best outcomes come from matching the policy to your real operations, keeping strong documentation, and actively managing risk.

If you want a quick, practical review, we can sanity-check your staffing structure, processes, and current limits, then help you compare EL options that fit your factory.

Call to action

Want a UK Employers’ Liability quote for your garment factory? Call 0330 127 2333 or visit insure24.co.uk to get started.