What is employers liability insurance?
Employers liability insurance (otherwise known as EL insurance) will protect against claims arising from injury or illness of your employees.
The insurance will pay legal costs incurred in defending allegations and compensatory damages arising from any award or settlement.
At get indemnity
™ employers liability insurance can be combined with a number of additional covers such as professional indemnity
and product liability
Is employers liability insurance compulsory in the UK?
All employers have a duty of care to provide a safe working environment for their employees. If you fail and an employee is injured, or becomes ill, as a result of your negligence, you may be required to pay compensation.
Employers liability is one of the few types of business insurance which is compulsory under UK law. Both employers liability insurance and public liability insurance play an important role ensuring you have the ability to meet any compensation awards.
It is worth noting employers are responsible not only for their own acts of negligence, but also for those of their employees.
Who does employers liability insurance cover?
An employee is typically defined as 'any person who is under a contract of service with the policyholder. Employers liability will typically include self-employed persons, hired persons, students, and voluntary workers.
The injury or illness must have been caused in connection with the policyholder's business activity. However, employers liability cover can also include first aid, medical, ambulance, fire and security services and maintenance.
Employers liability insurance definitions are typically homogenous, however it's worth discussing with an insurance broker
to ensure the cover meets your needs.
How much employers liability insurance do we require?
The minimum limit as described by the UK government website
must be for a £5 million limit. However, the vast majority of insurers will offer £10 million at no additional cost.
The amount of employers liability insurance you require will depend upon the industry you work and whether your employees perform manual work. For example, many companies working within the construction industry will purchase between £15 million to £25 million.
Zurich have identified 6 steps to choosing Employers Liability limits
. Prudent businesses and organisations are increasingly purchasing an Excess of Loss
policy to provide increased limits for employers liability, public liability and fleet insurance
Example employers liability insurance claims:
Below are common employers liability claim scenarios, with slips, trips and falls the most frequent:
Slips, trips and falls
Exposure to hazardous chemicals or materials
Burns or scalds
Working at hight or underground
Muscle strains handling or lifting heavy objects
Crashes and collisions
Repetitive strain injury
Other hazard objects
With employers liability insurance your organisation is protected from having to make significant compensation payments as a result of injury or illness of your employees.
How to manage your employers liability risks?
Employers liability risks can be mitigated by implementing a risk management
> communicates policies and procedures;
> provides effective training and support;
> implements effective risk assessments and risk reviews;
> maintains protective equipment, clothing and machinery;
> monitors and reports on H&S effectiveness; and
> applies a disciplinary procedure for negligent employees.
The HSE offers templates and general advice on how to assess and control risks in the workplace.
To compare employers liability insurance cost, please complete our online application
How much can employers liability insurance claims cost?
Personal injury compensation can include financial recompense for any expenses incurred, loss of earnings, possible loss of future earnings, pain and suffering.
Note the discount rate was amended in March 2017 (and again in August 2019) by the Lord Chancellor has had a significant impact on how damages are calculated over a long period.
An Employee suffers a broken back and brain injuries after an accident, they are likely to require significant long-term care: A claim paid before March 2017 (+2.5% rate) equals £4.9m, whereas a claim paid after August 2019 (-0.25% rate) equals £9.8m.
The example above identifies what a significant impact the change in law has had on the potential cost of personal injury claims.
What is a 'claims occurring' employers liability insurance policy?
Employers liability insurance works on an occurrence basis, whereby the policy period in which the loss occurred will respond, irrespective of when the claim is made.
This is required because some diseases and subsequent claims may not become apparent until years after the employee was exposed to unsafe conditions.
For example, if an ex-employee becomes ill from asbestosis while they worked for you in 2001, but claims years after when the disease is identified, the occurrence policy in 2001 will respond to the claim.
The above ensures if a business becomes insolvent or is acquired, there are no disputes as to who is responsible. For gradually developing diseases, such as asbestosis, the insurers who covered the employers liability risk over the development period will share the cost.
Are we required to display our employers liability insurance certificate?
Employers must display, at each premises, a certificate of employers liability insurance to demonstrate the employer has the required insurance.
Subsequent amendments to the regulation now allow for a certificate to be made available electronically, potentially through an intranet site, provided all employees have access to it.
Fine for not displaying your employers liability insurance certificate
If you do not hold valid employers liability insurance, you can potentially be fined £2,500 for each day you are not insured. Whereas, you can potentially be fined £1,000 if you do not display your employers liability insurance certificate.
The Health and Safety Executive offers a brief guide for employers regarding the Employers Liability Compulsory Insurance Act 1969.
What is the Employers Liability Tracing Office (ELTO)?
The Employers Liability Tracing Office (ELTO)
is an independent not-for-profit company. Created to provide claimants with access to a database of policies to help find the insurer of their former employer.
In addition, the Financial Conduct Authority maintains a list of all insurers responsible for employers liability insurance claims.
How to compare employers liability insurance cost?
Employers liability insurance quotes are available by completing our online application, along with a number of other business insurance covers.
At get indemnity
we have access to a number of wholesale insurers that can offer a range of property and liability insurance
Commonly purchased under a package insurance policy designed for your business activities. We continue to see stable market conditions for employers liability insurance, driven mainly by an abundance of insurer capacity.
This guide is for information purposes and based on sources which we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.