What is Employer’s Liability Insurance?
Employer’s Liability insurance helps you to pay compensation and any legal costs if an employee is injured or becomes ill because of the work they do for you. Compensation pay-outs often include medical costs and loss of income due to the employee not being able to work, as well as reimbursement for any legal costs associated with the claim.
Claims can be brought against your company for one-off injuries such as trips or slips, or long-term and ongoing illness caused as a result of the work carried out. It’s important to keep in mind that claims can still be brought against your business even if the employee no longer works for you, this is because it can take time for symptoms to become apparent.
Your policy should cover claims from anybody working for you including permanent employees, contract, casual and seasonal employees, and labour-only contractors. EL insurance covers claims from any person that is deemed and employee. An employee
- has National Insurance contributions and income tax deducted from their salary
- has the location, hours and conditions of their work controlled by their employer
- cannot be replaced by their employers if they are unable to work
The policy should also cover claims brought by temporary staff including students and people on work placements, as well as volunteers, advisors, referees, and marshals.
You should display your EL certificate clearly and make it available to inspectors if asked, failure to do so can result in a fine of £1,000.
Who is exempt from Employer’s Liability Requirements?
There are some businesses that are not required to have EL insurance including companies with no employees, and family businesses that employ only family members.
Purchasing Employer’s Liability Insurance
Your EL insurance must be purchased through an authorised insurer, either directly or by using a business insurance broker. The minimum amount of cover required is £5 million as soon as your employ your first member of staff, however depending on the nature of your business and the risks involved you may need cover for a higher amount.
Employer’s Liability premiums vary depending on the amount of cover you require and the level of risk associated with your business. Insurers will look at how many people you employ and the nature of your work to give you a price. Professions such as plumbers, engineers, and electricians often face higher premiums because these areas are deemed higher risk than others.
You should also make sure your insurance is comprehensive to cover yourself against the cost of defending your business against a liability claim, a cost which could prove harmful for start-ups or SMEs.
For advice on finding the right level of Employer’s Liability insurance our expert insurance brokers are here to help. Call us on 01926 495 113 or use our contact form to request a call back.