Employers’ Liability Insurance

Employers’ Liability Insurance

Employers’ Liability Insurance is required by law for any UK business that employs staff or uses labour only sub-contractors. Employers’ Liability Insurance provides you with indemnity should an employee sustain an injury or disease during the course of his employment and seek compensation from his/her employer.

This means, should an employee (or sub-contractor) sustain serious injuries they could sue the business for whom they were working if they hadn’t been supplied with the relevant safety equipment or had suitable training. They may be entitled to compensation which the business would be forced to pay if Employers’ Liability cover is not in place.

The Employers’ Liability (Compulsory Insurance) Act 1969

This legislation stipulates the legal requirement for Employers’ Liability Insurance and explains which companies are legally required to have the cover in place. There are some exemptions for family businesses and the legislation can be quite difficult to understand.

The limit of indemnity

The law requires you to provide a minimum of £5 million of cover, though most insurers will offer a £10 million limit of indemnity as standard.

Employers’ Liability – Legal Definition

In the event of accidental Injury sustained by any employee of the insured caused during the period of insurance and arising out of and in the course of their employment by the insured in the course of the trade or business, and within the territorial limits, the Insurance Company will indemnify the insured in respect of all sums which they become legally liable to pay as compensation and claimant’s costs and expenses, for such injury.