Employers Liability Insurance

Employers’ liability is the legal liability of an employer to pay damages to an injured employee or the representatives of a fatally injured employee.

Although it is possible to purchase separate employers liability insurance policies it is more common to find them written in conjunction with a Public Liability Insurance policy or part of a package insurance such as shop insurance or combined business insurance.

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Employers’ Liability (Compulsory Insurance) Act 1969

subsequently amended, requires all employers carrying on business in Great Britain to:

  • insure against legal liability for damages in respect of bodily injury, death, disease or illness
  • insure with an authorised insurer
  • purchase cover for at least £2 million per occurrence
  • display a valid certificate of insurance at each place of work.

The Act applies to all employers with very few exceptions. The exceptions include:

  •  certain government agencies
  • family businesses where the only employees are members of direct family and the business in not incorporated - it is advisable to consider cover even in these circumstances
  • as from 2004, there are allowances for limited companies where the sole employee is the sole shareholder in the business.

The Act imposes a statutory requirement on an employer to insure against an employee making a claim for compensation. The detail of the claim has to be assessed and for it to be successful, it has to be proven that the employer was in some way ‘at fault’ or in breach of their statutory duty.

Limits of Indemnity

Like other classes of liability insurance, it is rare to refer to the sum insured under the policy. The term limit of indemnity is generally used, as this represents the maximum liability of the insurer in respect of any one occurrence.

The Employers’ Liability (Compulsory Insurance) Regulations 1998 specified that

  • the limit of indemnity per occurrence must be £5 million
  • employers’ liability certificates have to be kept for 40 years after cover expires

In practice most policies issue in the United Kingdom are issued with a £10 million indemnity limit. Where a  need for a higher limit has been identified then additional cover may be purchased in the form of Excess Layer or Excess of Loss Insurance.

We offer a range of employers liability insurance facilities from a range of providers. If you would like to obtain a quotation please follow this link or call us during office hours on 01270 767327.