Leaflet on Compulsory Employer Liability Insurance
25/01/06
Employers are required by law to insure against liability for injury or disease to their employees arising out of their employment. To help employers understand what is required the Health and Safety Executive (HSE) has published a revised guidance leaflet - Employers? Liability (Compulsory Insurance) Act 1969 A guide for employers.
The HSE stress that the guide is not a legal interpretation of the Employers? Liability (Compulsory Insurance) Act and it has no legal status.
What is employers? liability insurance?
The Employers? Liability (Compulsory Insurance) Act 1969 is intended to ensures that your employer has at least a insurance cover against any such claims that might be brought by employee. Employers? liability insurance is intended to enable any employer can meet the cost of compensation for their employees? injuries or illness whether they are caused on or off site. Unlike public liability insurance, employers? liability insurance is compulsory. An employer can be fined if they do not hold a current employers? liability insurance policy that complies with the law.
In general a business will require employers? liability insurance if:
The business deducts national insurance and income tax from the money you pay them; or
That business has the right to control where and when they work and how they do it; or
The business supplies most materials and equipment; or
The business has a right to any profit your workers make although the business may choose to share this with them through commission, performance pay or shares in the company; or
The business requires that person only to deliver the service and they cannot employ a substitute if they are unable to do the work; or
The person is treated in the same way as other employees, for example, if they do the same work under the same conditions as someone you employ.
The guide also provides answers to questions such as:
Which insurance companies can sell employers? liability insurance?
Can the insurance policy contain conditions?
Can the insurer make the business pay a part of any claim for compensation?
How much cover will the business require?
Is employers? liability insurance required for all the people who work for the business?
Does the business require to disclose to the employees that they have employers? liability insurance?
Does the business need to keep copies of certificates of insurance, which are out of date?
Employee Liability Insurance
[back]
