Employers' Liability Insurance
Employers' liability (EL) insurance provides cover if a claim is made against you by an employee injured at work, or by an employee who has become ill as a result of their work for your company.
Even if you only have one other employee, you are legally required to have employers' liability insurance with an authorised insurer.
EL insurance can be added to any Hiscox professional indemnity quote or office policy when you also choose to purchase public liability insurance. It's not available as a standalone policy.
- Why you need EL
- Employers' liability certificates
- The Health and Safety Executive (HSE)
- The definition of employee
- Claims example
- Quote and buy online
Why you need EL
If an employee is injured at work, or becomes ill as a result of their work while in your employment, they're likely to pursue you, their employer, for damages.
Employers' liability insurance covers the cost of defending such claims and any the compensation you may be required to pay.
Even if your business employs only one other person, you are legally required to purchase this type of insurance.
The only exemptions are for:
- Limited companies where the owner is the sole employee
- Unincorporated family businesses where all employees are closely related
Unless you are exempt, the law states that you must be insured for at least £5 million. However, in practice, most insurers offer cover of at least £10 million.
Fortunately, even though the amount of cover is high, premiums are low because claims are uncommon.
Employers' liability certificates
When you take out the policy, and each year at the anniversary of taking out the policy, we will send you your Certificate of Employers' Liability Insurance.
You must, by law, display the certificate where your employees can easily read it.
You are required to retain copies of all your Certificates of Employers' Liability Insurance for at least 40 years. This is because claims can be made many years after the injury or illness is caused – in the case of asbestosis, for instance.
The Health and Safety Executive (HSE)
The Health and Safety Executive (HSE) enforces the law on employers' liability insurance. They've produced a guide to employers' liability, which will help you to understand your legal obligation.
It is worth noting that HSE inspectors can fine you up to £2,500 for each day which you are without suitable insurance. And failure to display the certificate of insurance – or to make it available on request – can result in a penalty of up to £1,000.
The definition of employee
According to the HSE guide to employers' liability:
"There are no hard and fast rules about who counts as your employee for the purposes of employers' liability insurance.
"What matters is the real nature of your relationship with the people who work for you and the degree of control you have over the work they do."
So just because you don't refer to someone as an employee, you may still be required to protect them under your employers' liability insurance.
It's always advisable to inform us if you take on:
- Volunteers
- Students who work for you unpaid
- People who are not employed by you, but are taking part in youth or adult training programmes
- Schoolchildren on work experience programmes
Claims example
A delivery of new computers arrived at your office. Everybody was eager to get them set up and switched on.
But not everyone was so eager to carry the boxes up two flights of stairs.
One particular employee was right to be apprehensive. While picking up one of the boxes, he felt a twinge in his back. An hour later, he was in serious pain.
Off work, and less than impressed with his statutory sick pay, the employee claimed for his loss of earnings. You were relieved to find that your employers' liability insurance would cover his claim.
Quote and buy online
Employers' liability insurance can be added to any Hiscox professional indemnity insurance quote or office policy when you also choose to purchase public liability insurance.
If you would like to discuss your business insurance requirements with our dedicated consultants, please call us on 0845 370 9030 between 9 and 5.30, Monday to Friday.