Employers’ liability insurance changes announced

Thousands of employees who have suffered illness or injury at work could be set to receive compensation, following the release of a new employers' liability insurance consultation paper from the Government.

In the past, employees who become ill as a result of serious industrial diseases have struggled to claim compensation from their employer. This is because the symptoms of certain sicknesses - particularly asbestos-related diseases – can often appear many years after the injury was originally inflicted.

However, under the Department of Work and Pensions’ new proposal, suffering workers will be able to turn to a dedicated tracing office. This will assist them in tracking down key employers’ liability insurance documents from companies that have either ceased trading or lost their policy.

It is planned the Government tracing office will include an electronic database of employers’ liability insurance, so that lost policies can be found quickly and easily.

The Government also confirmed that the creation of an Employers’ Liability Insurance Bureau (ELIB) is likely to get the go-ahead. Operating in a similar way as the Motor Insurance Bureau (MIB), the ELIB would act as a fund of last resort for employees injured at work, compensating them in the event that their employer fails to carry the correct insurance.

The Association of British Insurers (ABI) has said it is concerned the Employers’ Liability Insurance Bureau poses a moral hazard, and may encourage employers to cut back on their insurance in the knowledge that there is a last resort available for employees.

However, union UCATT has greeted the plans with open arms, with General Secretary Alan Ritchie stating:

“The government's announcement is excellent news and an important step forward. Far too often workers develop life-threatening illnesses because employers have failed to provide adequate protection from harmful substances. If a worker's health is ruined, they deserve compensation, by establishing ELIB, the government will ensure this occurs.”