What is Employer’s Liability Insurance?
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What is Employer’s Liability Insurance?

Employers are responsible for the health and safety of their employees whilst at work. Your employees may be injured at work or they, or your former employees, may become ill as a result of their work while in your employment. This could result in employees claiming compensation from you if they believe you are responsible.

Employer’s liability insurance will enable you to meet the cost of compensation that may occur as a result of employees’ injuries or illnesses caused by their employment.

The cover protects anyone you employ including;

  • Full and part time workers
  • Freelancers or contractors you may hire
  • Temporary staff and trainees
  • Volunteers and those partaking in  work experience with yourselves

Legislative requirement

The Employer’s Liability Act 1969 requires businesses to have at least a minimum level of insurance cover against any employee injury or illness claims.

Further to this, The Health and Safety Executive (HSE) enforces the law and HSE inspectors can check that you have employer’s liability insurance with an approved insurer for at least £5 million. Failure to do so, can result in a fine of £2500 for every day you are not properly insured.

When you take out or renew a policy, your insurer will provide you with a certificate of Employer’s Liability Insurance. A copy of this must be displayed where your employees can easily read it, which can now be electronically providing your employees know how and where to find it and have reasonable access to it e.g. they all have access to a computer as part of their job. Businesses can be fined a further £1000 for not displaying their Employer’s liability certificate.

Do residential management companies (RMC’s) and Right To Manage Companies (RTM’s) also require this cover?

If your RMC or RTM is a limited company you do require this cover even if there is no payroll. This is because a director of a company is also an employee as well as any unpaid volunteers, so by law this cover must be in place. It becomes even more important if cleaners, gardeners or handymen are utilised.  If individuals such as these provide labour and do not have their own materials/equipment, do not work for other business or individuals and/or do not submit invoices for work undertaken then the person is likely to be an employee for the period they work for you. This can mean they may look for compensation off you in the event of any injury or illness and it is highly unlikely your Public Liability Insurance will indemnify you.

So it is different to public liability insurance?

Yes it is! Public liability insurance covers you for claims made against you by members of the public or other businesses but not your employees. Whilst recommended, public liability insurance is not a compulsory requirement whereas employer’s liability insurance is.

If you have further questions or want to check that you have the correct cover in place, please contact our team on 01789 761670.

For further information please also use the following publication:

https://www.hse.gov.uk/pubns/hse40.pdf