Here are our top FAQ’s regarding Employers’ Liability Insurance
Q. Why is there a need for employers’ liability insurance?
A. In the past there was little or no protection if an employee suffered injury or disease as a result of their employers’ negligence. As society has evolved laws have been established to protect employees. Employers’ liability is now a compulsory insurance to indemnify employees if they are injured because of their employers’ negligence.
Q. Do I need employers’ liability insurance?
A. The Employer Liability Compulsory Insurance Act 1969 makes it a legal requirement for employers to carry employers’ liability insurance. There are few exceptions, notably if there is a limited company with one director and no employees. You may not require employers’ liability if you are employing family members – see the Government’s website.
Q. Who is classed as an employee in relation to employers’ liability insurance
A. Directors, direct employees, work experience people and any other person working under the direction and control of the employers. This can include labour only sub-contractors and freelancers – see our related blog.
Q. What level of cover is required?
A. The minimum legal requirement is £5,000,000 and this is the amount stated on the certificate of employer liability insurance. In practice insurers generally provide £10,000,000 cover as standard. Higher limits should be considered if there are multiple employees at one site.
Q. What are the fines for not having cover?
A. If you are not properly insured the fine can be £2,500 per day!
Q. Can I buy employers’ liability insurance in isolation?
A. Generally employers’ liability is purchased in conjunction with public liability or as part of a business combined package. There are some circumstances where employers’ liability insurance can be purchased on a standalone basis. Ask us for details.
Q. How are employers’ liability insurance policies rated?
A. Employees liability policies a normally rated on the estimated wage roll, although some insurers will work on the number of employees for smaller risks. The type of work undertaken will have a bearing on the premium charged. For instants the rate charged for a roofer will be higher than that for an estate agent.
Q. What can I do to minimise the cost of employers’ liability insurance?
A. Making sure that the insurers have a split between the category of employees is important as well as ensuring that health & safety procedures are being complied with.
Q. Is there a way to prevent an employee claiming against my company?
A. No. If any employee wants to make a claim, this cannot be prevented. The insurer will either accept a claim or they will provide defence cost if they feel that their insured is not at fault or the claim is spurious.