If an employee is injured whilst at work, or a former employee become ill potentially as a result of their work while in your employment, the business may find itself subject to an Employers’ Liability claim.

The Employers’ Liability (Compulsory Insurance) Act 1969 mandates that a business with employees have appropriate insurance cover. The legislation specifies that a minimum limit of indemnity of £5m must be in place, however in practice the minimum provided by the UK insurance market is £10m.

There are a few instances where businesses are not legally obliged to hold Employers’ Liability Insurance:

• Family businesses where all of the employees are closely related (husband, wife, civil partner, parents, grandparents, step-parents, children, grandchildren, stepchildren, siblings and half siblings). However, this exemption does not apply if the business is incorporated as a limited company.
• Companies where the only employee is the owner, and that employee also owns 50% or more than the shares of the company.
• Most public organisations such as government departments, local authorities and police constabularies
• Health bodies such as NHS trusts

There is extensive information available on Employers’ Liability Insurances available from the Health & Safety Executive website, covering questions on overseas employees, ensuring evidence of the cover is accessible to employees as well as the different types of workers you may engage and for whom you may need Employers’ Liability Insurance coverage.

The majority of businesses also have a requirement Public Liability Insurance, albeit this is not a legal requirement.