Employers’ Liability Insurance UK
The majority of companies are required by law to have liability insurance to protect themselves from an employee accident or sickness caused by their work. This article’s goal is to make sure you know exactly what’s expected of you, so read on to learn about employers liability insurance and why it’s essential to your business in 2023. This is not a legal interpretation of the Employers’ Liability (Compulsory Insurance) Act as only the courts have the authority to interpret the law, so be mindful of that. If you would like to read more information or learn more about the pricing of business insurance, you can do so here .
Below is a useful table about popular insurance companies in the UK based on what they offer and their Trustpilot rating:
E mployers’ Liability Insurance: What is it?
A company’s first responsibility is the health and safety of the people who work there. During their time working for you, workers can get sick or injured on the job. If they think you’re to blame, they may sue you for damages.
If any of your employees gets hurt or becomes ill while at work, employers’ liability insurance will pay for their medical bills and lost wages.
What Does Employers’ Liability Insurance Cover?
Employers’ Liability covers you for:
Loss of personal property or its destruction
Damage to personal property at work or as a result of work activities
Injury to employees and their relatives
Damage caused by an employee
Theft of personal property from your property
Damage to your property at work or as a result of work activities
Reasonable legal fees that you have to pay for employment-related claims against you
Medical Costs
Essentially, employers’ liability insurance covers any accidents an employee has, as long as they happened on the site or were a direct result of working for the company. Usually, they are minor injuries like tripping over equipment on the floor, slipping because of wet floors, or unstable shelves, which are common everyday accidents that anybody could be a victim of.
However, workers in dangerous professions can suffer from more severe injuries like a plumber involved in an explosion, a stewardess involved in a plane incident or a courier in a car accident. Typically, these are riskier occupations, so insurers encourage more cover and costlier premiums, but this ensures that all the treatment is covered. Employers’ liability for a minor accident may only be necessary to cover pain medication, but for a graver one could include surgery, hospitalization and more vital medication.
Slips and trips are minor accidents that happen in a few seconds. Still, long-term accidents and health implications and also covered by employers’ liability and should not be overlooked. For receptionists, for example, repetitive strain injury is an increasingly more common condition in which pain is felt from using your hands and fingers for the same repeated movements too fast and too long.
Firefights often feel more serious long-term health implications, that breathe in the smoke and hazardous chemicals every day for years.
2. Lawsuits
Employers’ liability massively protects employees, but it also provides coverage for employers. Often workers are involved in accidents in which they demand compensation for their injury and the entire ordeal they faced.
When medical expenses are not enough, they may decide to go through the arduous process of a litigation battle, suing their employer for putting them in a dangerous position or not adopting risk prevention tactics. As a result, the company’s directors must hire adequate legal aid in the form of a lawyer to represent themselves and tell their side of the story.
Not only are lawyers costly, but there are also expenses associated with filing documentation and the debt amount owed to the worker if they win. Employers’ liability covers all of this so that the employers do not have to dip into profits to pay.
3. Lost Income
When an employee is physically injured, it has already been mentioned that they would likely require treatment or hospitalization. Usually, accidents are minor, and the said employee can return the next day, ready to continue in a significantly lower amount of pain. On the other hand, workers in unsafe environments may sustain more complex injuries and, even after treatment, need to take a few days or weeks off to recover fully.
Usually, this is targeted at builders: for example, if a bricklayer fell off of their ladder and broke multiple bones in addition to a concussion, they made need more time to recuperate. Furthermore, even if they were to continue with work, their motility would be limited, and the services they perform would be to a lower standard. Employers’ liability offers compensation for lost income, given as a lump sum, so employees’ salaries do not suffer from accidents.
Employers Liability insurance: Exemptions
Employers’ liability insurance is not needed by law for certain companies, such as:
Companies with no employees
Family-owned enterprises with staff made up solely of relatives
The Employers’ Liability (Compulsory Insurance) Act of 1969 mandates that you have a minimum level of insurance protection against such claims if you are in business in the UK. In the event of any short term or long term illness or accident involving one of your workers, you’ll be covered by your employer’s liability insurance. However, suppose your workers are injured in a car accident while working for you. In that case, your motor insurance should be able to cover any of the costs of their medical bills independently.
Liability insurance for the general public is something else entirely. However, it does not provide coverage for lawsuits brought against you by customers or other companies. Employers’ liability insurance is required by law, even if public liability insurance is often optional.
If you don’t have current employers’ liability insurance that conforms with the law, you risk a hefty punishment.
Requirements for Employers’ Liability Insurance
In the UK, employers must have some form of liability insurance. This applies to businesses with at least one employee, whether the business is large or small. In other countries, such as the United States, there are different requirements for employers’ liability insurance policies. Ideally, employers should have a policy that covers employees in the event of bodily injury, accidental death and disablement, death, and property damage.
Employers’ Liability Insurance If a person is injured at work, they must first determine whether their employer has insurance. If so, the worker should make a written statement to that effect.
To determine if you need a policy, you must establish how likely any wrongdoing will occur in your workplace.
Some examples of wrongful behaviour include:
Medical malpractice (i.e., an error in diagnosis or treatment that leads to a worker’s injury)
Injury (i.e. a passenger falls out of a car that a worker is driving)
Infection (i.e., a worker uses equipment that spreads infection and infects other workers) • Contractual liability (i.e., a worker breaks a contract that they signed)
Negligence (i.e., a worker makes a mistake that causes an accident)
Breach of confidentiality (i.e., a worker leaks sensitive information to the public)
The list goes on, and it’s easy to see how an employer could be held liable for all sorts of things if they do not have the appropriate insurance coverage in place.
Some employers’ liability insurance policies also cover an employee involved in a personal injury claim. For example, if an employee injures someone while driving their car and claims against that person, the policy will cover any costs incurred.
When it comes to employers’ liability insurance, you cannot opt-out of purchasing coverage for yourself or your family members if you work for a company. If you choose not to purchase the coverage and there is an incident in which you (or someone you love) are injured, the legal fees could be astronomical.
Employers Liability Insurance: Overseas Companies
Do I require employers’ liability insurance? Employers’ liability insurance is required if any of your workers are regularly located in England, Scotland, or Wales (including offshore installations or connected buildings). Employers’ liability insurance is not required by British law to cover any of your workers outside the country (e.g. if they are on secondment).
To ensure you are compliant, you should look into whether or not you’re required by law to get insurance or take any other steps to safeguard your workers. In Great Britain, laws require employers’ liability insurance for personnel who spend more than seven days on an offshore site but are ordinarily located elsewhere.
Employers’ Liability Insurance: Why is it Important?
A licensed insurer is required. Failing to comply could result in legal consequences. Before purchasing employers’ liability insurance, make sure your insurer is licensed. Financial Services and Markets Act 2000 manages the activities of authorised insurers, which may be either individuals or corporations. The Financial Services Authority (FSA) has compiled a record to keep track of all licensed insurers. Search the FSA’s registry or call the FSA directly at 0845 606 1234.
Employers Liability Insurance: Conditions
If you get employers’ liability insurance, you and your insurer will agree on how much compensation will be paid. For example, the insurance will provide coverage for your company’s unique operations. Conditions that might limit how much your insurance has to pay are ones that neither you nor your insurer can agree to impose.
Insurers can’t deny claims for failure to provide reasonable protection for their employees against injury or disease just because the business hasn’t kept certain records or can’t provide the insurer with information from those records.
They can also deny claims if the business has done something the insurer told them not to do (such as admitting fault). Even so, this does not release you of your legal obligations to ensure the health and safety of your workers at all costs. You must, for example, do a thorough risk assessment and take all reasonably reasonable steps to safeguard your personnel and report any events.
Insurance companies have the legal right to sue policyholders who fail to satisfy their legal duties for the health and safety of any of your workers, which results in a claim.
Employers’ Liability Insurance: Compensation Claims
Any compensation agreed upon or granted by a court to your employee or former employee must be paid in full by your insurance. Your insurer may impose no restrictions that force you, your employee, or a former employee to foot a portion of the bill for any claim. Instead of paying the whole compensation amount, you might agree with your insurance and agree to pay back a portion of it.
Employers’ Liability Insurance: What Level of Cover Do I Need?
A minimum of £5 million in insurance coverage is required. You should, however, carefully assess your risks and responsibilities to see whether you need coverage of at least £5 million in insurance.
In practice, most insurance firms give coverage up to a maximum of £10 million. If your company is a member of a trade association, you may obtain employer liability insurance for the whole organisation. In this circumstance, the whole group, including subsidiary firms, must have a minimum of £5 million in insurance coverage on their own. Employers’ liability insurance policies may be carried in the names of many different companies. On the other hand, the insurance must provide coverage worth at least £5 million in total. It’s important to remember that the £5 million minimum insurance coverage covers expenses, so you may wish to get additional coverage. Read more about liability insurance here.
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