Employer’s liability insurance – the facts

Every employer that has an office in the UK is legally required to have liability insurance. This is to cover the employer against being liable to pay compensation if their employees are injured or catch a disease. This policy must cover employees whilst they are working in the UK, but does not necessarily extend to work undertaken outside the UK.

The reason for having this insurance is to ensure that an employee who is injured whilst carrying out their work can be properly compensated for any disease or injury they may suffer. If any employer is found not to have employer’s liability insurance, they may be fined. The minimum cover required in the UK is five million pounds.

Exceptions to the law

Any employee who is related to the employer does not have to be covered by this insurance; this includes, but is not limited to, a spouse, parent or child, siblings, grandparents and half or step relatives. Employees who are not normally resident in the UK are also not required to be covered. There are a small number of employers that are not required to have this insurance, they include health services such as care homes and Primary Care Trusts; the National Health Service; local health boards are also not required to have employer liability insurance.

If you are unsure about what cover your company should have, contact a specialist law firm like Accident Advice Helpline, especially if you have an accident or a near miss, and we will be able to help and advise you. We deal with hundreds of workplace claims and so are experienced in the legislation and will be able to resolve your problems quickly and efficiently.

Certification

The insurance must be taken out with an approved insurance company and a certificate may have to be displayed for the information of the employees involved. A certificate must always be available to prove the existence of the insurance; for example, in the case of an inspection or at the request of an employee.

Most people will have seen this certificate displayed in the office or building they work in. If you have not you can ask your employer for a copy or to view the original.

Allowable conditions in an employer’s liability insurance policy

The policy for a specific employer will cover their business and have certain conditions attached. The following conditions must not be included in your policy and your insurer cannot refuse to pay based on them:

  • You have not met the legal requirements regarding your employees safety
  • You have not followed their instructions regarding reporting incidents
  • You have admitted liability against their advice
  • You have not kept accurate records
  • You have not provided adequate protection against disease or injury

This does not mean that, as an employer, you can ignore employee safety; an insurance company must pay out the claim to the employee even if you have not complied, but the provider may then sue you to regain the cost if they believe you are at fault.

Employer’s liability insurance is a requirement designed to protect employees from accidents and disease at work; it also covers the employer against expensive compensation claims.

However, it is not an excuse for ignoring health and safety legislation and not completing the appropriate risk assessments, training and maintenance required to keep employees safe from injury or illness at work.

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