Last updated on November 12th, 2010 at 03:00 pm
Many small and medium businesses in the UK are legally obliged to take out Employers Liability Insurance to cover them against claims from their staff, or former employees, if they are injured or get ill because of their work for you.
If you are one of these businesses then you must also display the insurance certificate where it can be easily read by your staff – you should not just put it into a filing cabinet and forget about it, although since 1 October 2008 you have been allowed to display your certificate electronically. Employers choosing this method need to ensure their employees know how and where to find the certificate and have reasonable access to it.
Do I need to take out this insurance?
The answer for many businesses is “yes”, however you may not need to take it out if you have no employees (are a “one man” business), are a family business where all the staff are closely related (although I would suggest that it would be a good idea to take it out in this case and if you are a limited company the exemption does not apply anyway), or you are a public organisation such as a government department, local council, nationalised industry or a health service body.
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 your site. You should note that, any injuries and illness relating to motor accidents that occur while your employees are working for you are more likely to be covered by your motor insurance if they happen in a company vehicle.
You should not confuse employers liability with public liability. Public liability insurance is different. It covers you for claims made against you by members of the public or other businesses it does not cover you for claims made by your employees. While public liability insurance is generally voluntary, employers’ liability insurance is compulsory. You can be fined if you do not hold a current employers’ liability insurance policy which complies with the law and if it is not displayed.
Do I need to keep copies of certificates of insurance which are out of date?
Since 1 October 2008 there has been no legal requirement for employers to keep copies of out-of-date certificates.
However, you are strongly advised to keep a complete record of your employers’ liability insurance. This is because some diseases may appear many years after exposure to their cause (asbestosis for example) and former or current employees may claim against you for the period they were exposed to the reason for their illness.
Where can I find out more?
To take out the insurance or to find out if you need it and the level of cover you need (there is a current minimum of £5million, although most insurers give cover of at least £10million), you need to talk to your insurance broker, if you do not have one of these for your business then the British Insurance Brokers Association (BIBA) have a list of brokers that specialise in Employers Liability Insurance that will let you find a local broker.