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Wednesday 1 September 2010

Employers Liability Insurance - Do I need to tell my Employees that I have Employer's Liability Insurance

Further to my previous blog regarding Emplyers Liability Insurance, once you have taken out Employers Liability Insurance the Insurance company will issue (in addition to the Insurance policy and Schedule) an Employers Liability Certificate. This Certificate will confirm that the policy meets the minimum level of statutory cover as required under the Employers Liability (Compulsory Insurance) Act 1969 and that the policy has been issued by an insurer authorised to do so.

Most policies in the UK will have an indemnity limit of £10,000,000 which is the industry norm. However, the certificate will only confirm that the limit is at least £5,000,000 (to comply with the above legislation. To check the actual amount of cover provided under the policy you should refer to the insurance Schedule and not the certificate.

The certificate will also show the names of the companies covered by the policy, the period of insurance and the identity of the insurer.

A copy of your insurance certificate must displayed where your employees can easily read it. If you trade from more than one premises, a copy must be displayed at each location. These regulations changed slightly on 1st October 2008, when employers were allowed to display their certificates electronically, provided the employer ensures that 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.

With regard to offshore installations or associated structures, employers do not need to provide a copy of the certificate on every installation, although if an employee asks to see a copy of the certificate, he is entitled to to be provided with a copy as soon as possible and in any case within 10 working days of their request.

Since 1st October 2008, the previous requirement for employers to retain a copy of their Employers Liability certificates for a minimum of 40 years was overturned. Since that date there has been no legal requirement for employers to keep copies of out-of-date certificates. However, while it is no longer a legal requirement to keep these records, it is still prudent for an employer to continue to keep records of their Employers Liability insurers for some considerable time after the cover with a particular iinsurer has expired.

A claim can occur on an Employers Liabilty policy many years after an employee's period of employment ( for example, an industrial  disease such as Asbestosis may not manifest itself until many years after a person's period of employment has ended). If the employer has not kept adequate records and cannot identify the insurer concerned for the period of the employee's employment, any claim for compensation will be directly against the employer. With conditions such as Asbestosis and the like, any such compensation claim could be extremely expensive and potentially ruin the company. The need to retain accurate details of your Employers Liability insurers (ideally for up to 40 years) is therefore vital to safeguard the company.

These are just a few of the responsibilities imposed upon employers when taking out Employers Liability insurance.

If anyone is unclear or would like clarification on their responsibilities with regard to Employers Liability insurance please do not hesitate to contact me for assistance.

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