What is Employers' Liability Insurance?

18/06/2013 -- Mary Simpson
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Employers' liability insurance allows businesses to meet the costs of compensation and legal fees for employees who are injured or made ill at work through the fault of the employer.

Employees injuries

Employees injured due to an employer's negligence can sue for damages even if the business has gone into liquidation or receivership.

Contraction of illness or disease

If a member of staff suffers from an injury, or contracts an illness or disease in the workplace, say, and they can prove negligence on your part, then they could claim thousands - if not millions - of pounds in workplace compensation.

If you don't have Employers' Liability Insurance to cover you against such claims, then the business could go bankrupt.

Protection for employers

Insurance policies provide valuable protection for employers against claims by employees.

Compulsory Insurance

The Employers' Liability (Compulsory Insurance) Act 1969 ensures that businesses have at least a minimum level of insurance cover against any such claims.

What is an Employers' Liability Insurance Certificate?

When you take out an employers' liability insurance policy you will receive a certificate of employers' liability compulsory insurance.

You must display a copy of this certificate where employees can easily read it and keep copies for at least 40 years or face a fine of up to £1,000. You need to make these certificates available to health and safety inspectors on request.

A certificate of employer's liability insurance is compulsory under Regulation 1998 and it must be displayed at each place of business where a policy holder employs people covered by the policy.

The certificate is issued by the insurer and it details:

  • The name of the insurance company providing the cover
  • The policy number
  • The name of the policy holder
  • The date of the commencement of the insurance policy
  • The date of expiry of the insurance policy (at midnight)
  • Whether the policy to which the certificate relates satisfies the requirements of the law applicable in (for example) Great Britain, Northern Ireland, Isle of Man, the Island of Jersey, the Island of Guernsey and the Island of Alderney and offshore installations in territorial waters around Great Britain and its Continental shelf;

and

  • The minimum amount of cover provided by the policy (e.g. is not less than an amount such as £5 million or £15 million - for small businesses)
  • The certificate is signed on behalf of the insurance company (the Authorised Insurer)

For more information anout the law and ELI please read hse.gov.uk PDF: Employers' Liability (Compulsory Insurance) Act 1969 A Guide For Employers

Prices of Quotes

To calculate the 'average' or 'typical' cost of employers liability insurance for your trade, profession or industry, gather a number of online and telephone quotes with similar policy features and compare like-with-like prices, averaging the total figure for all policies and dividing by the number of policies.