8 things you should know about Employers' Liability Insurance

Employers’ liability insurance is ultimately required to protect employees. It ensures that you can have compensation available to them should the worst happen. It is all too easy for any employee to be injured or become ill whilst at work, or even years later, as a result of their work for you.

Employers' liability insurance protects your business

A claim relating to employers’ liability insurance can fall into thousands of pounds of damages, potentially hindering your business with financial pressure as well as your reputation. For most small businesses the expense of legal teams to negotiate disputes would not even be a possibility, and this is why a specialised insurance product makes sense. With employers’ liability insurance cover, your insurer deals with any problems and pays out the full amount of compensation awarded by the Court, and you can continue with business as normal.

1. Employer’s liability insurance is a legal requirement. It is required for every employer of staff whether full-time, part-time, contracted, voluntary or self-employed at a minimum level of £5million cover. However, many specialist brokers provide £10million.
2. Exemptions include: publically funded organisations, companies where the owner is the sole employee and owns 50% or more of the share capital, or family businesses whereby employees are closely related.
3. Failure to comply results in serious fines. There are many cases where businesses are fined by HSE for failing to hold employers’ liability insurance up to the value of £2,500 for every day that you do not have cover in place and £1,000 for not displaying your certificate.
4. The certificate must be displayed. Once you have your employers’ liability insurance cover in place you are required to legally display this where employees can easily read it; either on a wall in your office, or since 2008 electronic publication that can be easily accessed is sufficient.
5. You should keep previous copies of certificates. You will not legally need to keep hold of any past certificates of employers’ liability insurance, however, it is recommended to in case a disease or illness caused by exposure from your business occurs at a later date.
6. Employer’s liability insurance also covers legal expenses. An employers’ liability policy not only covers the cost of the claim made by the employee or ex-employee but can even cover the cost of legal expenses incurred whilst defending the case.
7. Risk assessments will help ensure you gain the best cover. Minimise the risk of a liability claim by planning and implementing a Health and Safety policy with frequent risk assessments to make sure you adopt the best cover.
8. The cost of Employer’s liability insurance relates to your business. It will depend on the nature of your business, the number of people you employ and any previous claims history.

For more information read our ultimate guide to Employer's Liability Insurance.