Employers Liability

Employers' liability (EL) insurance enables your business to meet the costs of damages and legal fees for employees who are injured or made ill at work through the negligence of the employer. Employees injured due to an employer's negligence can seek compensation even if the business has gone into liquidation or receivership.

Since the 28 January 2007 the NHS can claim the costs of hospital treatment – including ambulance costs – when personal injury compensation is paid.

By law, an employer must have EL insurance and be insured for at least £5 million. Most insurers automatically provide cover of at least £10 million.

If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory EL insurance. Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company, are also exempt from compulsory EL insurance.

However, there is nothing to prevent an exempt employer from choosing to buy EL insurance, and many do – because of the financial security it can provide.

The Health & Safety Executive (HSE) is responsible for enforcing the law on EL insurance. You can be fined up to £2,500 for each day that you do not have appropriate insurance.

Displaying your EL compulsory insurance certificate and HSE inspections

When a policy is taken out a certificate of employers' liability compulsory insurance is issued..

This must be displayed where employees can easily read it. It can be displayed it either:

• as a paper copy, e.g. as a photocopy pinned to a notice board
• electronically, e.g. as a page on your intranet or as a document in a shared folder on your network

These certificates must also be made available to health and safety inspectors on request.

If the EL compulsory insurance certificate is not displayed or it is not made available to HSE inspectors when they ask, a fine of up to £1,000 can be issued.

To make sure that your business gets the right protection at the right price call the Noyce Team to protect your Employees.