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Employers' Liability Insurance

As an employer, you are responsible for the health and safety of your employees while they are at work. Your employees may be injured at work, or your former employees may become ill as a result of their work while in your employment.

They may try to claim compensation from you if they believe you are responsible.

Employers' liability (EL) insurance will cover your legal liability for injury, disease or death sustained by your employees arising in the course of their employment.

This insurance is legally compulsory for all businesses that have any employees (unless they are exempt under the Employers' Liability Compulsory Insurance Act 1969). By law, cover is required for at least £5 million.  In practice, however, most policies provide a limit of £10 million.

You must have EL Insurance for employees who are normally based in England, Scotland or Wales (including offshore installations). How you don't need EL insurance to cover employees who are based abroad (eg if they are a secondment). However, you should check whether the law in the country where they are based requires you to take out insurance. If any of your employees are normally based abroad but spend more than 14 days continuously in Great Britain or more than 7 days on an offshore installation, under the law of Great Britain you will need EL insurance for them.

Your insurer will issue you with an Employers' Liability Certificate each year as evidence of insurance. You are legally required to display this. However this requirement is satisfied if the certificate is made available in electronic form and employees have reasonable access to it. The Health and Safety Executive (HSE) who enforce the law on employers' liability insurance can check your insurance certificate at any point.  You may be fined up to £2,500 for any day you are without insurance and up to £1000 if you do not display your certificate or refuse to make it available.

You are not legally required to keep out-of-date certificates. However, given the long-tail nature and latency periods of some occupational diseases, you are strongly encouraged to retain a record of your EL insurance history as far back as possible and to keep that information alongside current data. It remains in the your best interests to retain insurance information because if no records can be found, it is the employer who will be responsible for the defence of any claims and the payment of any awards.

By identifying the activities, practices and market conditions that affect risk, we are working hard to help clients understand the factors affecting insurance premiums.

For further information, please contact a member of our Insurance Team to the right of this page.

Mitchell Charlesworth Insurance Solutions Ltd is registered in England and Wales no. 7002662 and is authorised and regulated by the Financial Conduct Authority.

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