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Employers’ Liability Insurance: The Essentials

Employers in Britain are legally responsible for the health and safety of their employees whilst they are at work. Employers’ liability insurance protects employers against any claims for compensation that employees, or former employees, may make if they are injured or become ill as a result of their work.

The Employers’ Liability (Compulsory Insurance) Act 1969 states that employers must have a minimum level of insurance in place which protects employers against employee claims for compensation.

Employers’ liability insurance is the type of policy which employers should have in place to protect themselves and the wellbeing of their employees. Employers’ liability insurance covers the cost of compensation for any employee injury or illness, regardless of whether this occurs on site or off site.

Employers’ liability insurance is mandatory in Great Britain and organisations can be fined up to £2500 for any day on which a policy is not in place. A fine of up to £1000 can also be enforced if a business fails to display their certificate of insurance. It is therefore essential to have employers’ liability insurance in place but it is also important to display the certificate of insurance in the workplace, in a location where all employees can view it.

In October 2008 it became possible to display employers’ liability insurance certificates electronically. Employers simply need to ensure all employees know how to view the certificate and have easy access to it.

It may not be necessary for organisations with no employees, a family run business or a public organisation, such as a government department, to have employers’ liability insurance.

It is also not necessary to have employers’ liability insurance for any employees based abroad though you should check insurance requirements for the country in which employees are based. If your business is part of a group, a policy for employers’ liability insurance can be taken out for the group as a whole.

When it comes to level of cover, businesses must be insured for at least £5 million though in practice most insurers offer cover of at least £10 million. When deciding on the level of cover you need, consider the risks and liabilities relevant to your organisation.

When arranging employers’ liability insurance, make sure you use an authorised insurer as it is illegal to do otherwise. Authorised insurers are individuals or companies working under the terms of the Financial Services and Markets Act 2000. In Britain, the Financial Services Authority (FSA) maintains a register of authorised insurers so you can easily check your insurer is authorised by searching this register.

To avoid making a claim on your employers’ liability insurance policy, take as many measures as possible to protect the health and safety of employees. Carry out regular risk assessments and take all reasonably practicable measures to protect employees and report any incidents that occur.

The author of this article is a part of a digital blogging team who work with brands like Gladiator Insurance. The content contained in this article is for information purposes only and should not be used to make any financial decisions.

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