Employers’ Liability Insurance a legal requirement!
Employers’ liability insurance protects a business and its owner against employees that make a liability claim as a result of an injury at work, or suffering a work related disease.
Many businesses will employ staff to contribute to its business operations. The employer is responsible for the health and safety of their employees whilst they are at their designated place of work.
Under the Employers’ Liability (Compulsory Insurance) Act 1969, it is a legal requirement for any business that employs any number of staff to purchase employers’ liability insurance. It will cover costs that could arise should an employee suffered an injury, illness or disease whilst working for you.
The risk of an employee being injured in an accident can be minimised by implementing a coherent Health and Safety strategy.
Health and Safety Executive (HSE) figures (2009/10) showed that 152 workers in the UK suffered fatal injuries at work, and 1.3 million people suffered from an illness believed to have been caused or made worse by their current or past jobs (HSE.gov.uk).
Such incidents could prove extremely costly, especially for small businesses. Not only would working days be lost, the employee could make a claim against you or your business for neglecting to ensure their safety. EL would cover the cost incurred resulting directly from the claim.
What will happen if I don’t purchase Employers Liability Insurance?
If a business with employees fails to purchase the correct level of employers liability insurance (EL), it will be classed as trading illegally. The business could be susceptible to penalties of up to £2,500 for every day that it traded without EL insurance or, at worst a maximum of 14 years imprisonment.
When EL is purchased, the buyer will be provided with a certificate that proves its validation. This will need to be visible to all employees. This can now legally be displayed in electronic format.
Claims can arise a years after an employee worked for you/your business as some diseases could take a long time to develop. Consequently, you should never dispose of previous EL records/certificates.
Please note…
• A sole trader, also known as ‘one man band’ will not need to acquire EL as it will not employ any staff.
• A family business will not need to obtain EL – Unless it is incorporated as a Limited Company.
• Work experience students and voluntary/unpaid ‘helpers’ will be classed as employees so as a result must be covered by EL Insurance.
