4 Key Facts about Employers’ Liability Insurance

Employees’ health and safety is every employer’s responsibility. If a member of staff is injured or falls ill at work, and it’s the employer’s fault, the employee can claim damages against their employer.

Taking out employers’ liability insurance means that the policy pays the legal costs of a claim along with any compensation.

The key facts on Employers’ Liability Insurance are as follows:

1. Employers’ Liability Insurance is a legal requirement

The minimum cover is at least £5m for all Limited Companies with more than one director or if they engage a worker (even a family member).

2. The definition of an employee is wide-ranging and might include individuals working for your business on a temporary basis

It doesn’t always matter if someone who works for you isn’t on your payroll as a permanent employee. If it can be argued that, to all intents and purposes, you are their employer, their welfare becomes your responsibility.

For example, you might be surprised to learn that all these workers are considered employees:

• Temps and seasonal staff
• Secondees
• Volunteers
• Work experience students
• Labour-only freelancers and subcontractors (using your equipment, in your office, under your supervision and direction).

3. There are daily penalties for not being insured

Non-compliance is an offence and carries a penalty of up to £2,500 for each day uninsured.

4. The certificate of insurance must be on display

Employers must display a copy of their certificate of insurance where employees can easily read it.  This Certificate must include details of the provider, policy number and the amount of cover provided.

Since 1 October 2008 employers have been able to display the certificate electronically on an intranet site or shared folder. Employers choosing this method must ensure that their employees know how and where to find the certificate and have reasonable access to it.  For many businesses a paper copy displayed on a Notice Board continues to be the most effective method of displaying the certificate.

 

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