What is Employers Liability Insurance?
Covering you against the costs of claims arising from employee injury or illness, at work
If your business is starting to build up a large workforce, it’s vital that you’ve got the right insurance in place to protect yourself against any disasters such as serious injuries, accidental damage, and the huge legal costs that will follow if you aren’t protected by the correct insurance policy. With businesses now under so much scrutiny for the way that they protect their employees, it’s vital that you’re considering a range of different types of insurance to cover the cost of compensation in the event of any unfortunate accidents. Liability cover helps to protect your business against the large claims that could be made against your business should something like this happen – you’ll be secured in the event that a worker becomes ill or injured as a result of the work that they conduct for your business, which could happen at any time and without warning. Of course, a claim in these circumstances could be crippling to your company, so you’ll want to make sure that you’ve got a liability insurance policy that you can rely on to keep your organisation protected when illness or injury strikes.
Employers liability insurance protects and provides cover for businesses in the event that a claim for compensation is made by an employee as a result of an injury or illness suffered due to the work they carry out in your business. The insurance covers against the cost of compensation claims arising from employee illness or injury, sustained during the time they carry out work for you and your business. Remember ultimately if an employee suffers a bodily injury and/or illness during work hours your business could be liable.
Employers Liability Insurance is a legal requirement if your business employs more than one person, whether they be paid, unpaid, volunteers or subcontractors (labour only), with a potential fine of up to £2,500 each day you go without the necessary cover.
All our policies come with at least £10 million worth of cover as standard, as is required by law.
Here at The Insurance Octopus, we’re dedicated to offering tailored insurance packages that meet your needs as a business – we understand that a one-size-fits-all approach can either leave you paying over the odds or leave you under-protected, so we ensure that each package we offer is designed with your requirements in mind. If you’re interested in finding out more on the topic of employers liability insurance, read on or get in touch with our friendly team of experts today!
How will Employers Liability Insurance help me?
With an Employers Liability cover in place your business and employees are protected. Our employers liability insurance also helps you and your business fulfil your legal requirement of having a minimum level of cover, currently set at £5 million, all our polices currently provide £10 million worth of cover. Your business will also be protected from claims for compensation, legal or medical expenses made by someone in your employment. When purchasing your Employers Liability policy, an Employer’s Reference Number (ERN) is required, this is provided by HMRC and is unique to all businesses.
Why do you need it?
So, you’re probably wondering why exactly you need liability insurance cover for your business – whilst there are many benefits of having this type of business insurance in place to help with things such as compensation claims and loss of income, it’s actually a legal requirement to have liability insurance for your business. By law, you must have Employers’ Liability (EL) insurance as soon as you become an employer. The policy must cover you for an amount of at least £5 million, and the insurer selected has to be authorised by the correct regulatory bodies. For this reason, employers’ liability insurance is essential for every business with staff working for them. By operating without this cover, you’re breaking the law and leaving yourself open to unimaginable losses in the event of a workplace injury or work-related illness.
Of course, your legal obligation isn’t the only reason to have liability insurance; there are many benefits in terms of the protection offered which make it a vital asset for any business to have at their side as they operate. As you may already be all too aware, workplace injuries can happen. Unfortunately, that is an unavoidable fact that every business must deal with as best they can. Whilst having preventative measures in place, such as rigid health and safety protocols and regular training for all staff, is a good first step, you’ll always need to have a liability policy in place to account for any claims for injuries and illness that may come your way. This type of insurance is specifically designed to provide businesses with the cover they need in these circumstances, so you can be sure that nothing will fall through the cracks or leave you liable to huge damages.
What does it cover?
Businesses with employees face much larger challenges, in terms of insurance, than sole-traders might – there are far more moving parts operating at the same time and one wrong move could spell disaster. Whilst the exact policy details can vary depending on the package that you’ve selected, there are a few constants that you can expect to be present regardless of which EL package you choose and whichever insurer you opt to sign up with. The lowest level of cover you’ll ever receive is £5 million, which is the minimum legal requirement for coverage for businesses in the UK. Here at The Insurance Octopus, we include £10 million of cover as standard, offering extra protection should you need it. The cover that you receive will encompass compensation costs for injured or illness-struck employees, which also includes their medical costs, the legal costs that may be accrued, and any other damages that are caused as a result of the injury/illness.
In certain circumstances, you may also find that former employees are able to make a claim for illness or injury, but only if the symptoms they’re showing are as a result of working for your company. Whilst it can vary from policy to policy, this will also be covered as part of your business insurance policy. If you want to learn more about the specific details of our policy wordings, please feel free to get in touch with our team here at the Insurance Octopus! Our team are on hand to discuss the services that we provide and will be able to answer your questions with jargon-free clarity, leaving you confident that you’ve picked the plan that best reflects the needs and requirements of your organisation.
Are any companies exempt from the cover?
There are also companies that are exempt from the need for Employers’ Liability Insurance – the businesses can still choose to obtain a policy should they wish to have that extra layer of protection in place, however they will not be forced to have one by law. Here are a few examples of when a business will not legally have to have an EL policy in place:
- Where all company employees are direct family members
- Public organisations such as government bodies and healthcare services
- Any company which is not limited and has only one employee (also known as a sole trader)
- A limited company where there is only one employee and that employee owns more than 50% of the total share capital
- Partnerships where directors operate as equal partners and do not have any other employees
As you can see, this means that there are exceptions to the rule that all businesses must have Employers’ Liability Insurance to cover up to £5m, but this doesn’t mean that having the cover in place is a bad idea – if your finances allow for it, we’d suggest having a liability policy in place at all time to ensure that you’re covered should anything happen to the people working at your business.
Will any employees be exempt?
It’s also worth noting that there are also exemptions in terms of your employees too – certain workers will also not need to be covered under this law, so if your staff is made up of the following people, you may not have to pay for a comprehensive liability policy. According to official government guidance, the exempt staff are:
- Unpaid students working for your business
- School children on a work experience placement
- People who are currently in a training programme who are not yet an employee
- People who volunteer at your business and are not classed as employees, but volunteers
Exempt employees do not, by law, need to be covered by an insurance policy, however you could still be liable for injury or illness that they suffer as a direct result of their work for your business should this ever happen. In these scenarios, it still remains the best practice to have an active business insurance policy in place to cover any additional costs or compensation payments that you need to pay out due to unfortunate circumstances. Without insurance in place, the cost of these claims could be hugely damaging, so if possible, try to ensure that you’re always protected by an adequate insurance plan.
Examples of when you’d need to claim
If you’re wondering what scenarios your insurance policy may come in useful for, you’re not alone – one of the most commonly asked questions we receive is with regards to the circumstances where your insurance policy might be used, of which there are many. In general, most workplace injures and illnesses will be covered within your plan, covering everything from physical injuries to mental health issues caused by the work that the employee is undertaking. Here are a few examples of when your insurance could be a very useful lifeline for your business:
If you have office-based staff that use computers or laptops for long periods, you may see that these employees often face health issues related to strain and stress on the back and eyes as a result of excessive use of their workstation. In these circumstances, you may find that the staff claim for loss of earnings or medical costs to cover treatment or corrective equipment such as chairs, back supports, or glasses, which will be covered within your insurance package.
There are, however, more serious instances where your insurance policy could protect your company from huge claims, for example, if a construction worker was to fall from unsecured scaffolding or if a shop floor worker in a warehouse was to be the victim of falling goods from a high shelf. In these cases, the injuries could be more serious, therefore increasing the potential damages that your company would have been liable for.
Things you need to consider
If you’re still wondering whether you should take out Employers’ Liability Insurance against your business to protect your business in the event of injury or illness, or to simply abide by the law, there are more guidelines in place to ensure that you have the correct policy in place. The cost of Employers’ insurance is fairly insignificant when compared with the amounts you would likely have to spend on compensation and damages if you were an uninsured business, so please be sure to take out a policy that covers your business effectively if you’re looking to not just avoid eye-watering compensation payments, but also fines and fees for breaking UK government laws. The fines that you could face are detailed below:
- A £2500 fine will be enforced for each day that your business operates without Employers’ Liability Insurance, should your business be one that must have one of these policies by law. This is put in place as a deterrent from operating illegally, forcing companies to abide by the laws or be faced with a considerable payment for each uninsured day
- If you do not display your EL certificate (which you’ll receive when purchasing a policy) when asked to do so by an inspector, you may be handed a fine of £1000. Failure to pay this fine will lead to more serious punishment and could also lead to a deeper investigation into your business and your operations
When purchasing EL insurance, you must provide your insurer with an accurate account of your staff, both clerical and manual. This is incredibly important, as your quote will likely be based upon the number of staff that you have working for your business to some degree, so an inaccurate staff count could lead to your policy being deemed void. To avoid this, be sure to provide your insurer with the exact number of staff that your business employs and update this with them should that number ever change for any reason, such as hiring or redundancies.
Arranging employers liability cover & The Insurance Octopus process
Here at The Insurance Octopus, we’re always looking to provide your business with the protection that it needs from claims, damages, and liability. We do this by crafting tailored policies that cover your company in the places where it’s most vulnerable, giving you confidence that you’re secured in the event of any disasters that happen to you or your staff. To discuss policies or to set up a payment plan on one of our packages, simply get in touch with our insurance experts today! Our team is compiled of industry-specific specialists, so you’ll be paired with an agent who will be able to serve your business best by using their existing knowledge of the industry. With this expert advice and support at the end of the phone, you can be sure that you’ll always be able to find the support you need when you need it, and you’ll also earn rewards for being a loyal customer through our Octopus Rewards scheme! Click here to learn more about the discounts and savings that you could make by sticking with The Insurance Octopus for all of your insurance needs!
When you’re considering taking out a policy, one of The Insurance Octopus specialists will discuss your business requirements with you and compare personalised quotes from a number of major UK insurance providers. We can provide you with your business insurance and documents on the same day in most cases, offering a range of flexible payment options, including Direct Debit. Speak to us today to get a quote.
Why choose The Insurance Octopus for your Employers Liability Insurance?
We proudly make buying insurance different and our cover comes with a range of benefits.
£10 million of cover
£10 million worth of employers liability cover is included as standard.
Fast specific cover
To help save you both time and money. We compare prices from a range of different insurers so you don’t have to.
A specialist who knows your industry
We'll connect you with an agent who specialises in your field. They understand many of the challenges you face, and can truly get to grips with the type of cover you need.
Easy claims process
Accidents can happen, so when something does go wrong you can rest easy knowing our team is on hand to make the claims process as quick and stress free as possible.
Octopus customer rewards
We pride ourselves on the value we offer our customers, and with Octopus Customer rewards we give our customers a few additional benefits to their insurance such as discounts and offers to save them money.
No mid term fees, ever
We don’t charge any mid-term fees at all during the life of your policy – so there are no hidden fees following any changes you might need to make.
How it works
Examples of Employers Liability Insurance in action
Employers liability claim from a waitress
A waitress at a restaurant takes a hot drink over to a table with customers waiting. Whilst on her way to the customers table the employee slips on the wet floor. The fall occurred due to the floor being cleaned with no wet floor sign visible and the employee receiving no forewarning of the wet floor. The slip and fall has led to the employee hitting their head and becoming concussed.
The employee has now had to take several weeks off work while receiving hospital treatment. Costs were incurred through constant travel between treatment locations as well as a loss of earnings for the time they’ve been unable to work. After making a claim and going through the courts the employer was found liable. The employee made a claim for loss of earnings and compensation which were both covered under the employers liability insurance held by the restaurant in question. The employer was also relieved to know that the court and other legal costs were also covered by the insurance.