Does employers' liability insurance cover employment tribunal claims?
Not as a legal requirement. In Great Britain, the law requires employers' liability insurance to cover liability for employees' bodily injury or disease arising from their work. The law does not mention employment tribunal claims such as unfair dismissal, discrimination or unpaid wages, so employers should treat them as a separate risk. What any particular policy includes depends on its terms.
What employers' liability insurance is for
GOV.UK says employers' liability insurance helps pay compensation if an employee is injured or becomes ill because of the work they do for the employer. HSE explains that it covers injuries and illness whether they are caused on or off site, and that motor accidents at work may be covered separately by motor insurance. HSE adds that public liability insurance is different: it covers claims by members of the public or other businesses, not claims by employees.
What tribunal claims are about
An employee, job applicant or trade union can take an employer to an employment tribunal over issues such as pay, dismissal and discrimination. Claims include unfair dismissal, discrimination at work, breach of contract and unauthorised deductions from pay.
GOV.UK says paying compensation is the most common outcome when an employer loses, and there is no limit in discrimination cases. A losing employer may also have to give the claimant their job back, pay witness expenses, or pay back some state benefits the claimant claimed while the case was running.
Why the difference matters
Official statistics show the Employment Tribunal received 14,000 single claims in April to June 2026, 28% more than a year earlier. From 1 January 2027, the unfair dismissal qualifying period is expected to fall to six months and the cap on compensatory awards to be removed. GOV.UK notes future dates remain subject to parliamentary processes.
The 1969 Act's insurance duty is framed around bodily injury and disease. Any cover for tribunal claims, legal costs or awards depends on the wording of the policy concerned.
The law
“against liability for bodily injury or disease sustained by his employees…”
Sources
- Employers' liability insurance · GOV.UK
- Employers' Liability (Compulsory Insurance) Act 1969: a brief guide for employers · HSE
- Being taken to an employment tribunal · GOV.UK
- Being taken to an employment tribunal: if you lose the case · GOV.UK
- Make a claim to an employment tribunal · GOV.UK
- Tribunal Statistics Quarterly: April to June 2026 · GOV.UK
- Plan to Make Work Pay and Employment Rights Act: timeline update · GOV.UK
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
- Expected: six-month unfair dismissal qualifying period and no cap on compensatory awards
Future dates are expected dates and depend on Parliament.
What employers can do
- Keep employers' liability cover in place and its certificate on display
- Treat tribunal claims as a separate risk when reviewing insurance and budgets
- Read the wording of any policy to see which claims, legal costs and awards it covers
- Engage with Acas early conciliation when contacted about a claim
- Use fair, documented procedures for dismissals, grievances and pay disputes
Employment legal protection insurance can cover legal costs and awards in tribunal claims, alongside HR advice: how HR insurance works.
Related answers
- Do employers need employers' liability insurance? Yes. In Great Britain, most employers must have employers' liability insurance as soon as they become an employer, with cover of at least £5 million from an authorised insurer. It helps pay compensation if an employee is injured or becomes ill because of their work. Some employers are exempt, and Northern Ireland has its own legislation.
- What can an employment tribunal claim cost an employer? It depends on the claim and the outcome. In Great Britain, unfair dismissal compensation is a basic award plus a compensatory award, currently capped for most claims at the lower of £123,543 or 52 weeks' pay. Discrimination compensation has no limit. Each side usually meets its own legal costs, but a tribunal can order costs in some cases. Claimants pay no fee.
- What happens when an employee makes an employment tribunal claim? In Great Britain, the employee must usually notify Acas first, and Acas offers both sides early conciliation. If that does not resolve things, the employee files a claim, and the employer must respond on form ET3 within 28 days. The tribunal then manages the case, often through a preliminary hearing, before a full hearing and a decision.