8 May, 2015
HSE’s guide to Employers Liability
What is Employers’ Liability Insurance?
Employers are responsible for the health and safety of their employees while they are at work. Your employees may be injured at work or they, or your former employees, may become ill as a result of their work while in your employment. They might try to claim compensation from you if they believe you are responsible. The Employers’ Liability (Compulsory Insurance) Act 1969 ensures that you have at least a minimum level of insurance cover against any such claims. 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 site. However, any injuries and illness relating to motor accidents that occur while your employees are working for you may be covered separately by your motor insurance.
Do I need Employers’ Liability insurance if my employees work abroad or my company is based abroad?
If any of your employees are normally based in England, Scotland or Wales (including offshore installations or associated structures) you must have Employers’ Liability insurance. Under the law in Great Britain you do not need employers’ liability insurance to cover any of your employees who are based abroad (eg if they are on secondment). However, you should check whether the law in the country where they are based requires you to take out insurance or take any other measures to protect your employees. If any of your employees are normally based abroad but spend more than 14 days continuously in Great Britain, or more than seven days on an offshore installation, under the law in Great Britain you will need employers’ liability insurance for them.
Which insurance companies can sell me Employers’ Liability insurance?
You must use an authorised insurer. If you do not, you may be breaking the law. You should check that your insurer is authorised before you take out Employers’ Liability insurance. Authorised insurers are individuals or companies working under the terms of the Financial Services and Markets Act 2000. The Financial Conduct Authority (FCA) maintains a register of authorised insurers. You can check whether a company is authorised by searching their register on http://www.fca.org.uk, or telephoning the FCA on 0800 111 6768.
How much cover will I need?
You must be insured for at least £5 million. However, you should look carefully at your risks and liabilities and consider whether you need insurance cover of more than £5 million. In practice, most insurers offer cover of at least £10 million. If your business is part of a group, a policy for employers’ liability insurance can be taken out for the group as a whole. In this case, the group as a whole, including subsidiary companies, must have cover of at least £5 million. You can have more than one policy for employers’ liability insurance. However, the total value of the cover provided by the policies must be at least £5 million. You should bear in mind that the £5 million minimum level of cover includes costs, so you may wish to purchase cover of more than this.
Do I need to tell my employees that I have Employers’ Liability insurance?
When you take out or renew a policy, your insurer will give you a certificate of employers’ liability insurance. This must state clearly the minimum level of cover provided and the companies covered by the policy. You must display a copy of the certificate of insurance where your employees can easily read it. 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. Factors to consider include the availability of the chosen format and ensuring employees understand how to use it. For example, this arrangement may be suitable where all employees have access to a computer as part of their job. If you have employees working in the Isle of Man, Jersey, Guernsey or Northern Ireland as well as in England, Scotland or Wales you can use the same certificate in all locations. However, you must check that this complies with any local requirements as well as the law in Great Britain. If your employees work on offshore installations or associated structures, you do not need to provide a copy of the certificate on every installation. However, if one of your employees asks to see a copy of the certificate, you must provide one as soon as possible and certainly within ten working days of their request. You can provide a copy electronically or by fax if this is easier for you.
What happens if I do not have Employers’ Liability insurance?
The Health and Safety Executive (HSE) enforces the law on employers’ liability insurance and HSE inspectors can check that you have employers’ liability insurance with an approved insurer for at least £5 million. They may ask to see your certificate of insurance and other insurance details. You can be fined up to £2500 for any day which you are without suitable insurance. If you do not display the certificate of insurance or refuse to make it available to HSE inspectors when they ask, you can be fined up to £1000.