If your business employs people, Employers’ Liability Insurance is an important part of protecting your business and your employees. For many UK employers, it is also a legal requirement.

But what exactly does Employers’ Liability Insurance cover, who needs it, and what could happen if you don’t have the right cover?

What is Employers’ Liability Insurance?

Employers’ Liability Insurance is designed to protect your business if an employee becomes ill or is injured as a result of their work and makes a claim against you. For example, an employee could suffer an injury while using workplace equipment, develop an illness linked to their working environment, or be involved in an accident while carrying out their duties.

If your business is found responsible, the costs associated with a claim can be significant. Employers’ Liability Insurance can help cover compensation and associated legal costs, subject to the terms and conditions of your policy.

Is Employers’ Liability Insurance a legal requirement?

In the UK, most employers are legally required to have Employers’ Liability Insurance as soon as they become an employer. Generally, businesses must have at least £5 million of Employers’ Liability cover, although many insurers provide £10 million as standard.

There are some exceptions, so it’s important to understand whether the rules apply to your particular business. Failing to have the required insurance can result in enforcement action and financial penalties, making it important to check that your business has appropriate cover in place.

Who needs Employers’ Liability Insurance?

Employers’ Liability Insurance can apply to businesses of all sizes and across a wide range of industries.

You may need cover if you employ:

• Full-time or part-time employees
• Temporary or seasonal staff
• Apprentices
• Some casual or temporary workers

Whether someone is considered an employee can depend on the nature of their working relationship with your business. Simply calling someone a contractor or self-employed does not necessarily mean Employers’ Liability requirements don’t apply.

If you’re unsure, it’s worth discussing your circumstances with your insurance broker.

What does Employers’ Liability Insurance cover?

The exact cover provided will depend on your policy, but Employers’ Liability Insurance is generally designed to respond to claims where an employee alleges that they have suffered injury or illness as a result of their employment.

For example:

A workplace accident

An employee is injured while carrying out their normal duties and claims that the business failed to provide a safe working environment.

A work-related illness

An employee develops an illness that they believe was caused or contributed to by their working conditions.

An accident involving workplace equipment

An employee is injured while operating machinery or equipment and makes a claim against the business.

In situations like these, Employers’ Liability Insurance may help with covered compensation claims and associated legal costs, subject to the policy terms.

Employers’ Liability vs Public Liability

Employers’ Liability and Public Liability are often confused, but they protect against different risks.

Employers’ Liability Insurance is primarily concerned with claims made by employees in connection with their work.

Public Liability Insurance generally relates to claims made by members of the public or other third parties who suffer injury or property damage as a result of your business activities.

Depending on your business, you may need both types of cover.

What happens if your business doesn’t have the required cover?

If your business is legally required to have Employers’ Liability Insurance but doesn’t have it, you could face significant penalties.

You may also be exposed to the financial consequences of an employee claim without appropriate insurance in place.

It’s therefore important not only to have a policy, but to ensure that it remains appropriate as your business develops.

How Goldstone Broking Group can help

At Goldstone Broking Group, we understand that every business operates differently. Your insurance should reflect your employees, activities, industry and individual risks rather than simply being a standard policy.

As an independent insurance broker, we work with a wide range of insurers to help businesses find appropriate cover for their circumstances.

Whether you’re employing your first member of staff, expanding your existing team or reviewing your current insurance, our team can help you understand your options and arrange tailored cover.

Not sure whether your business has the right Employers’ Liability Insurance?

Talk to Goldstone Broking Group today.