Every UK employer must get Employers’ Liability (EL) insurance as soon as you become an employer, your policy must cover you for at least £5 million. If an employer does not have EL insurance, they can be fined by The Health and Safety Executive (HSE) £2,500 for every day that they are not property insured.
Why do I need EL Insurance? What does it cover?
Employers are responsible for the health and safety of their employees while they are at work. Your employees may be injured at work or they, or your former employees, may become ill because of their work while in your employment. They might try to claim compensation from you if they believe you are responsible. The Employers’ Liability (Compulsory Insurance) Act 1969 ensures that you have at least a minimum level of insurance cover against any such claims.
Employers’ liability insurance will enable you to meet the cost of compensation for your employees’ injuries or illness whether they are caused on or off site. However, any injuries and illness relating to motor accidents that occur while your employees are working for you may be covered separately by your motor insurance.
Do I need employers’ liability insurance if my employees work abroad?
If any of your employees are normally based in England, Scotland, or Wales you must have employers’ liability insurance. Under the law in Great Britain, you do not need employers’ liability insurance to cover any of your employees who are based abroad.
If any of your employees are normally based abroad but spend more than 14 days continuously in Great Britain, you will need employers’ liability insurance for them.
Which insurance companies can sell me employers’ liability insurance?
You must use an authorized insurer. If you do not, you may be breaking the law. You should check that your insurer is authorized before you take out employers’ liability insurance. Authorized insurers are individuals or companies working under the terms of the Financial Services and Markets Act 2000. The Financial Services Authority (FSA) maintains a register of authorized insurers. You can check whether a company is authorized by searching their register on www.fsa.gov.uk or telephoning the FSA on 0845 606 1234.
Do I need to tell my employees that I have employers’ liability insurance?
When you take out or renew a policy, your insurer will give you a certificate of employers’ liability insurance. This must clearly state the minimum level of cover provided and the companies covered by the policy. You must display a copy of the certificate of insurance where your employees can easily read it or display the certificate electronically. If an employee asks to see a copy of the certificate, you must provide one as soon as possible and certainly within ten working days of their request.
Are they any exceptions for employers?
The following employers can be exempt in certain circumstances –
- family businesses, i.e., if all your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies
- companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company
- most public organizations including government departments and agencies, local authorities, police authorities and nationalized industries
- health service bodies, including National Health Service trusts, health authorities, primary care trusts and Scottish health boards
- some other organizations which are financed through public funds, such as passenger transport executives and magistrates’ courts committees
