Employers’ Liability Insurance

Employers’ Liability Insurance (ELI) is compulsory.  It is a legal requirement under The Employers’ Liability (Compulsory Insurance) Act 1969.  This insurance enables you to meet the costs and compensation an employee may seek if injured or ill due because of the work they carried out.  (Injuries due to motor accidents are covered separately by your motor insurance).

Employers are responsible for the health and safety of people who work for them.  Limited companies require ELI unless only one person or close family members are employed.  The minimum cover by law is £5 million, although £10 million is often the norm these days. You must seriously consider your risks and take out appropriate cover.

It is the Health and Safety Executive (HSE) that enforces this law and can fine companies £2,500 a day for not having valid insurance.  Failure to display the certificate of insurance can lead to fines of £1,000 (the certificate can be displayed electronically).

Accidents happen as HSE bulletins constantly remind us.  Sometimes the fines imposed by the HSE seem quite low but the levels of compensation the individual received are not revealed.  A painter who fell through scaffolding and suffered permanent brain damage was awarded a lump sum of £2.4million and on going payments of £105,000 a year for life.  Similarly a manager whose injuries following an accident left him with serious disabilities received a lump sum of £5.1million.  The legal costs are additional to these sums and can also be considerable.  The NHS can also reclaim the cost of treating injured patients to all cases where personal injury compensation is paid.  The maximum charge in respect of an injury is £45,153.

These are all big numbers so it is important you are covered.  It’s easy to see how a company could become bankrupted if uninsured.  Get in touch and I’ll talk you through your company’s risks and arrange the right insurance policy for you.