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A Guide to Employers’ Liability Insurance

Aug 27, 2019

If you employ staff, then you have a duty of care to look after those staff whilst they are carrying out the work that you require of them.

As an employer you are liable for any injury or illness that an employee sustains during the course of their work.

Here we look at what employers’ liability (EL) insurance is, the types of claims it can cover, whether your business needs employers’ liability insurance and how much cover you need.

What is employers’ liability insurance?

Employers’ liability insurance is designed to provide cover if your business is sued by an employee or ex-employee for a work-related injury or illness.

EL insurance will typically cover costs to defend the claim as well as covering any compensation costs or damages that may be awarded as a result of the claim.

What types of claim does employers’ liability insurance cover?

No matter how careful you are, accidents resulting in injury do happen. Likewise, work related illness do occur and can often see claims come in years later.

Examples of the types of circumstances that could see a claim made against your business include:

– An employee trips over a loose cable in the office and injures themselves
– An employee falls from a height due to unclear safety instructions or training
– An employee suffers an injury or illness due to excessive use of computer equipment
– An employee contracts a disease due to something they were exposed to during the course of their work

Does my small business need employer’s liability insurance?

If you are a UK business that employs staff, then you are legally required to have employers’ liability insurance in place.

There are some exemptions to this, for example you may not need EL insurance if you employ only family members or someone who is based abroad.

The exemptions are quite complex. And given that the penalties for not having employers’ liability insurance in place when required are substantial, it is best to check the Employers’ Liability (Compulsory Insurance) legislation. Or you may want to check with us as we’ll be able to advise you.

If you do not currently employ staff, then you will not need employers’ liability insurance. But as soon as you consider employing staff this will be something you must factor into your preparations and costs.

How much employer’s liability insurance does my small business need?

Legislation states that your employers’ liability insurance policy must provide a minimum of £5 million worth of cover. It also states that the insurance must be provided by an authorised insurer.

Some policies provide more than this, so it is really dependent on your business as to how much cover you want to take out (as long as you meet the minimum £5 million cover requirement).

You must also be aware that you can be fined up to £2,500 per day that you are not properly insured. There are also penalties of up to £1,000 if you do not display your employers’ liability insurance certificate or are unable to show your certificate to an inspector when asked.

If you employ staff, then employers’ liability insurance is a necessity and is entirely separate from any other optional types of employee benefits you might be considering.

At Anthony Jones we work closely with our business insurance customers to understand their businesses and therefore the risks that may be presented. This means we are able to ensure that you have the correct covers (and amount of cover) in place to protect your business if a claim against you should occur. Talk to us today if you have any questions about whether your business needs employers’ liability insurance on 020 8290 9080 or email us at business@anthonyjones.com.

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