What is Employers' Liability insurance?
A brief guide to Employers' Liability insurance
Under UK law, businesses are required to insure against liability for accident or injury to their employees which occurs as a result of their employment.
While employees are at work it is the responsibility of the employer to ensure their health and safety. If an employee is injured at work, or they or any former employees fall ill because of their work while under employment then they are entitled to try and claim compensation if they feel their employer is responsible. Employers Liability insurance ensures that you have a minimum level of cover against such claims.
Whether an employee is injured on or off site they can still claim compensation, Employers Liability insurance will help you meet the cost of legal defence and compensation if required.
Employer's Liability is comulsory and failure to meet this requirement could result in a fine.
Public Liability insurance is different as this protects the business against claims made against the business by the public or other businesses, but does not cover any claims made by employees.
Where do I get Employers Liability insurance?
Employers Liability insurance must be bought through an insurer or broker authorised and regulated by the Financial Conduct Authority. It is against the law to purchase from an unauthorised company.
The Financial Conduct Authority (FCA) maintains a register of authorised insurers and brokers which you can check on https://register.fca.org.uk/. CARE is an authorised insurance broker.
How much cover does a business need?
£5 million is the set minimum amount a business can be insured for. Every business is different so you should carefully assess the risks and liabilities of your organisation. Most insurers or brokers will offer more than £5 million cover.
If your business is part of a group then employers liability insurance can be taken out by the group as a whole, the cover will still need to be at least £5 million.
You can have multiple employers' liability policies but the cover provided by the policies must meet the minimum of £5 million.
What happens if I do not have Employer's Liability insurance?
The law on employer's liability insurance is enforced by The Health and Safety Executive (HSE) whose inspectors can check that you have employer's liability insurance from an authorised insurer or broker and can ask to see your certificate of insurance.
If you do not have adequate cover the business can be fined £2,500 for any day which you are without suitable cover and if you refuse to show a HSE inspector your certificate you can be fined up to £1,000.