Employers liability insurance in UK
Introduction :
Employers Liability Insurance is a type of insurance policy that provides financial protection to employers in the United Kingdom in case an employee becomes ill or injured as a result of their work. It is a legal requirement for most employers in the UK to have Employers Liability Insurance, and failure to comply with this requirement can result in significant penalties. In this outline, we will explore the importance of Employers Liability Insurance, the legal requirements for having this insurance, the coverage provided by the policy, the exclusions from the policy, the cost of insurance, how to obtain insurance, the claims process, and more.
Legal Requirements :
In the UK, Employers Liability Insurance is a legal requirement for most employers. The legal requirement for Employers Liability Insurance is outlined in the Employers’ Liability (Compulsory Insurance) Act 1969, which requires employers to have insurance coverage to protect against claims made by employees who have become ill or injured as a result of their work.
The law defines an employee as anyone who works under a contract of service or apprenticeship, which includes part-time and temporary workers, as well as volunteers, unpaid interns, and contractors who are deemed to be employees for legal purposes.
Employers who fail to comply with this legal requirement can face significant penalties, including fines of up to £2,500 for each day they are without insurance coverage. Additionally, employers can face criminal charges if they do not have Employers Liability Insurance and an employee is injured or becomes ill as a result of their work.
It is important to note that there are a few exemptions to the legal requirement for Employers Liability Insurance. These exemptions include companies with no employees, family businesses with only family members as employees, and companies that are not limited liability partnerships or public limited companies with only one shareholder who is also the only employee. However, even in these cases, it may still be advisable to have Employers Liability Insurance to protect against potential liability claims.
Coverage :
Employers Liability Insurance provides coverage to employers in the UK for claims made by employees who become ill or injured as a result of their work. The coverage provided by the policy includes:
- Bodily injury: Employers Liability Insurance provides coverage for bodily injury suffered by employees while performing their job duties. This can include injuries resulting from accidents, such as slips, trips, and falls, as well as illnesses caused by exposure to hazardous substances or other work-related conditions.
- Occupational diseases: Employers Liability Insurance provides coverage for occupational diseases, which are illnesses caused by exposure to hazardous substances or other conditions in the workplace over an extended period of time. Examples of occupational diseases include mesothelioma caused by exposure to asbestos, hearing loss caused by exposure to loud noise, and respiratory illnesses caused by exposure to dust or chemicals.
- Legal costs: Employers Liability Insurance also provides coverage for legal costs associated with defending against claims made by employees. This can include the cost of hiring a lawyer, as well as court fees and other legal expenses.
The coverage provided by Employers Liability Insurance typically has a limit, which is the maximum amount that the insurance company will pay out for a single claim or over the course of the policy period. The limit is usually expressed as a total amount, such as £10 million or £5 million, and is determined by the insurance company based on factors such as the size of the employer and the nature of the work being performed.
Exclusions :
There are certain exclusions from Employers Liability Insurance coverage that employers should be aware of. These exclusions may vary depending on the insurance policy and provider, but some common exclusions include:
- Intentional acts: Employers Liability Insurance typically does not cover claims resulting from intentional acts, such as assault or battery, committed by the employer or other employees.
- Claims from independent contractors: Employers Liability Insurance generally only covers claims made by employees who are defined as such by the Employers’ Liability (Compulsory Insurance) Act 1969. Claims made by independent contractors or self-employed individuals are typically not covered by the policy.
- Claims from family members: Employers Liability Insurance may not cover claims made by family members who work for the employer, as they may not be considered employees under the law.
- Claims resulting from criminal activity: Employers Liability Insurance typically does not cover claims resulting from criminal activity, such as theft or fraud, committed by the employer or other employees.
It is important for employers to review the specific exclusions of their Employers Liability Insurance policy to ensure that they have adequate coverage for their business needs. Employers should also consider additional insurance policies to protect against potential gaps in coverage, such as public liability insurance or professional indemnity insurance.
Cost of Employers Liability Insurance :
The cost of Employers Liability Insurance can vary depending on several factors, including the size of the employer, the nature of the work being performed, the claims history of the employer, and the limits and deductibles selected for the policy. Other factors that may affect the cost of the policy include the location of the business, the industry in which it operates, and the number of employees.
Employers Liability Insurance is typically sold as part of a package policy that includes other types of business insurance, such as public liability insurance, and the cost of the policy will depend on the coverage limits and deductibles selected for each type of insurance.
To get an accurate estimate of the cost of Employers Liability Insurance, employers should contact insurance providers and request a quote. Employers should compare quotes from multiple providers to ensure that they are getting the best coverage at the most competitive price.
It is important for employers to remember that the cost of Employers Liability Insurance is a necessary expense to protect against potential liability claims from employees. Failure to have adequate insurance coverage can result in significant penalties and financial losses for the business.
How to Get Employers Liability Insurance :
Employers Liability Insurance can be obtained through various insurance providers in the UK. Here are the general steps to get Employers Liability Insurance:
- Assess your business needs: Determine the amount of coverage you need based on the size of your business, the nature of the work being performed, and the number of employees.
- Contact insurance providers: Research and contact insurance providers that offer Employers Liability Insurance. You can contact them by phone, email or through their website.
- Provide information: When you request a quote, you will need to provide information about your business, such as the number of employees, the nature of the work being performed, and your claims history.
- Review the quote: Once you have received a quote, review it carefully to ensure that it meets your coverage needs and fits within your budget.
- Purchase the policy: If you are satisfied with the quote, you can purchase the policy by paying the premium. The insurance provider will provide you with the policy documents, including the policy schedule, policy wording and the certificate of insurance.
It is important to note that Employers Liability Insurance is a legal requirement for most businesses in the UK that have employees. Failure to have adequate coverage can result in significant penalties and financial losses. It is important for employers to work with reputable insurance providers to ensure that they have adequate coverage for their business needs.
