Employers Liability Insurance

Employers Liability Insurance is a business insurance policy which covers you for the defence costs and compensation claim where necessary in the event of an employee (or representative of an employee) bringing legal action against you because the employee has suffered injury, illness, or accidental death as a result of their employment with you.

All employers have a duty of care to their employees. Employers need to ensure that they take the necessary steps to protect them from harm. Should an employee suffer injury, illness or accidental death at work they may seek compensation from their employer if they feel as though these steps haven’t been taken. Employers Liability Insurance will react in these circumstances, protecting the business from the expenses incurred in the legal dispute, as well as their legal liability to their employee following its conclusion.

Employers liability insurance covers your business in the event an employee seeks compensation for bodily injury, illness or accidental death suffered as a result of their employment with you. The coverage provided by employers liability insurance can be understood in two categories:

 

1. Defence costs

Should an employee bring legal action against their employer, alleging said employer is responsible for bodily injury, illness or accidental death the employee has suffered, the Employers Liability insurance will cover the legal representation/defence costs as necessary.

 

2. Legal liability

Should the outcome of this dispute be that the employer is liable for the illness, injury or accidental death, the policy will also pay the compensation owed, up to the limit of indemnity on the policy.

 

 

The statutory minimum for this cover is £5,000,000 however for the majority of trades Qdos provides cover at the industry standard £10,000,000. Please note the statutory minimum limit of £5,000,000 will apply in some circumstances (e.g. claims related to asbestos exposure or originating offshore), full details on the limit are provided in policy documentation.

A claim can be made on employers liability insurance after the policy has expired but in order for the policy to react to an incident it must have been in place at the time the incident or cause that gave rise to the claim occurred. For example, an employee exposed to asbestos may not develop symptoms of asbestos-related diseases until 50 years later. If the employer had a suitable employers liability insurance policy in place at the time the employee was exposed to asbestos, the policy would react if/when the employee claims compensation some years later.

 

Policy Excess 

The policy excess for Qdos Employers Liability Insurance is nil.

You may be required by law to hold employers liability insurance if you employ one or more workers - see 'Is employers liability insurance compulsory?' below for more information if this applies to you.

Often contracts however, particularly standardised agency contracts, will stipulate the policy as a contractual requirement alongside Public Liability. It may be worthwhile checking with your agency/end client the genuine requirement of the policy if this applies to you. Public Liability however, is a basic insurance for all self-employed individuals looking to insure their business.

Employers Liability Insurance is compulsory under the Employers Liability (Compulsory Insurance) Act if you employ one or more workers, whether they are fee earners, clerical, or otherwise.

For sole traders, Employers Liability is not a legal requirement if your only employees are close family members such as a spouse or civil partner, however this exemption does not extend to limited companies.

If you are a ‘Ltd’ Company, you are the only employee and you own at least 50% of the issued share capital of the company, you will not be legally required to hold the policy.