Why do I need employers’ liability insurance?
All businesses that employ staff are legally required to ensure that they are covered against any claims made by employees who allege to have been injured or made ill whilst at work.
According to the Employers’ Liability (Compulsory Insurance) Act 1969 employers are responsible for the health and safety of their employees whilst at work. If an accident was to occur where an employee was injured or made ill and it is believed that you or your business operations were the cause, the employee could try to claim compensation from you.
Accidents can happen every day at the work place. An employee could have any number of unfortunate accidents which could result in devastating injuries. If an employee was to suffer an illness whilst in your employment, such as asbestos poisoning, they would be entitled to enter a claim against your business for compensation. This is applicable to both current and past employees.
An employers’ liability insurance policy will enable you to meet the cost of compensation for your employees’ injury or illness.
Employers Liability (Compulsory Insurance) Act 1969 requires all employees to have at least £5 million of cover but most insurance companies stipulate £10 million of employers’ liability as standard.
The Law
It is a legal requirement for any business with any number of employees to hold employers liability insurance. If you are found trading without the required liability insurance you could be faced with some significant prosecutions.
On purchase, you will be provided with a certificate of employers’ liability insurance, which must be displayed to your employees at all times. The Employers' Liability (Compulsory Insurance)(Amendment) Regulations 2008 states that this can now be displayed in an electronic format, as long as it is reasonably accessible to employees.
If you fail to obtain valid employers liability insurance, you could be faced with fines of £2500 for every day you have traded without it. You could also be fined up to £1000 for not displaying the certificate of employers’ liability insurance.
