Understanding the Need for Employers’ Liability Insurance

There are many different types of insurance that employers should consider having, but employers’ liability insurance goes one step further. That is because, in the UK, almost all employers are legally required to carry an employers’ liability policy.

Do I need Employers Liability Insurance?

All organisations that employ more than one person are required to carry at least £5 million worth of employers’ liability cover. Larger organisations may require a greater amount depending on the size of their workforce and what their operations consist of. Employers can be fined up to £2,500 for every day that they are not properly insured. Additionally, even employers that do have adequate cover may be fined £1,000 if they do not display their employers’ liability certificate or refuse to present it to inspectors upon request.

Employers’ liability carries stiff penalties and insurance is legally required because of the importance of the security that it provides for both organisations and their workers. This type of cover may not only render necessary financial aid for employers in the event of an employers’ liability claim, but it also creates peace of mind for employees as they go about their duties. Both parties can take comfort in the knowledge that there is a contingency in place in the event of an incident occurring.

Exceptions

It is worth noting that there may be some exceptions to the UK’s law requiring which organisations are required to have employers’ liability cover. Some employers that are not legally required to do so might include:

  • Most public organisations
  • Some publicly funded organisations
  • Health service bodies
  • Family businesses that employ only close family members
  • Organisations operated by a single employee

These exceptions may be nuanced, so it is important for employers to review their policies or contact a broker to analyse their specific situation.

Claim Example

One reason that employers’ liability cover is so important for all employers is that claims do not necessarily have to stem from catastrophic events or uncommon circumstances. Accidents resulting from seemingly simple scenarios can still lead to costly consequences.

For example, a situation as normal as an employee carrying a cup of coffee back to their desk can result in a costly claim. If an uncleaned spill or a raised piece of carpet causes the employee to slip or trip, they may not only suffer injuries from the fall, but also potential burns due to their hot beverage spilling. The employer may then be held liable for not only the resulting medical costs, but also expenses related to the employee travelling to and from hospital for check-ups. A court may even order the employer to pay the employee’s legal fees.

Planning Ahead

When acquiring an employers’ liability insurance policy, it is important for organisations to be realistic about the types of risks that their employees face and what the consequences could be. Employers must be honest with brokers in order to make sure that their policies are properly tailored to fit their needs.

Examples of Employers’ Liability Claims

Employers can be held liable for many different types of accidents or issues. In addition to the physical and emotional harm that an incident can cause for an employee and their colleagues, an employers’ liability claim can also result in devastating financial and reputational damage. Following an accident, it is important that organisations be able to maintain normal operations while also managing the aftermath. However, government fines, restitution resulting from a claim and the cost of legal representation can all present financial challenges. Fortunately, an employers’ liability insurance policy can provide much-needed relief.

Common types of accidents that may trigger this type of cover include:

Slips, trips and falls
These accidents can take place in many different settings across a variety of sectors. If an employee trips over clutter or slips on a wet surface, it is possible that their resulting injuries could lead to an employers’ liability claim.

Electric shocks
Electricity can present a potential hazard for employees across all industries. If equipment or infrastructure are poorly maintained, employees who may be performing simple tasks can suffer serious injuries that may lead to a claim.

Manual handling injuries
Moving and lifting heavy objects can lead to both injuries and long-term health problems, such as back pain. If employers do not take appropriate precautions, such as carrying out risk assessments, minimising manual handling tasks, and providing proper equipment and training, a claim may arise.

Falls from height
Some of the most serious injuries in the workplace can result from falls from height. If workers are performing tasks at height and are injured, employers risk facing a claim if they have not implemented fall arrest systems and provided adequate training and personal protective equipment.

Industrial diseases
In the event that employees are exposed to hazardous materials while working, they may develop health issues such as occupational asthma, noise-induced hearing loss or asbestosis. These illnesses and injuries can affect employees for the rest of their lives and may lead to costly claims.

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