Employers Liability
Insurance
Can my insurance policy contain
conditions?
The policy will contain an agreement
with your insurer about the
circumstances in which they will pay
compensation. For example, it may
cover specific activities relating to your
business. However, there are certain
conditions which could limit the amount
of money your insurer might have to
pay.
To comply with the agreement, it is
important that you meet your legal
responsibilities to protect the health
and safety of your employees, such
as carrying out suitable and sufficient
risk assessments, taking all reasonably
practicable s teps to protect your
employees and reporting incidents.
At Mayo Wynne Baxter, our Legal 500 Top Tier rated Insurance
Team defends personal injury claims brought against business
owners who have failed to take out employers’ liability insurance,
or whose policy has lapsed before an accident involving one of
their employees. Uninsured claims can expose the business to a
significant financial liability.
Employers Liability Insurance has been
compulsory since 1972, following the
introduction of The Employers’ Liability
(Compulsory Insurance) Act 1969, which
was designed to ensure employees
health and safety whilst at work. Under
the Act, you must be insured against
liabilities of at least £5 million. Most
insurers offer cover of at least £10
million.
The following questions are commonly
asked:
Why do I need Employers Liability
Insurance?
If you are an employer you are legally
obliged to have employers’ liability
insurance. If you don’t have it, you can
be fined up to £2,500 for every day
without it.
Are there any exceptions?
There are some exceptions under the
Act where businesses do not require
employers’ liability insurance. These
include:
• Public organisations, such as
government departments, local
authorities, and police authorities.
• Companies without any employees, just
an owner.
• A family business employing only family
members.
What does it cover?
Employers’ liability insurance covers the
cost of compensation claims brought
by employees and former employees,
who are injured at, or become ill through
work. This includes historic claims, such
those relating to asbestos exposure.
Are Motor Accidents covered?
This is an area which can lead to some
dispute between the relevant insurers, as
they try to avoid liability but in general,
any injuries and illness relating to work
related motor accidents tend to be
covered separately by your business’
motor insurance policy, even though they
may have occurred during employment.
If your insurer believes that you have
failed to meet your legal responsibilities
for the health and safety of your
employees and that this has led to the
claim, the policy may enable the insurer
to seek redress against you.
How do I trace a previous Employers’
Liability Insurer?
In the event of a historic claim being
brought against you, such as one for
mesothelioma, you will need to check
all of your business’ archives for details
of any previous insurers. If you cannot
find any records of whom the insurers
were at the time or even if there was
any insurance, you can carry out a
search of the Employers Liability Tracing
Organisation (ELTO) data base. This
should reveal the relevant insurer from
1972 onwards and sometimes, even in
cases before.
How do I reduce my Claims Risk?
You can minimise the risk of a claim by
ensuring that you have robust health
and safety practices in place. These
make for a great first line of defence,
as they reduce the chance of accidents
and illness. It is also essential that
you know the regulations governing
your industry and carry out regular risk
assessments with your employees.
B
y Michael Mulcare
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