Employers Liability Insurance

If you have a small business with a number of employees, who may inadvertently become ill or injured due to your fault, you may want to obtain an Employer's Liability Insurance. This would provide some protection for yourself, your employees, and your business.

What is an Employers' Liability Insurance?

The Employer's Liability Insurance (EL) is an insurance that covers your business in case an employee is injured, would contract a disease, or suffer a fatality while at work. It covers also legal costs of injured employees because of your perceived negligence, as the employer.

Employers, as required by law, must have an Employers Liability Insurance and should be insured for at least £5 million. Insurers usually insure businesses up to £10 million. Failure to comply with this law could mean a fine of £2,500 per day of non-compliance.

Type and Cost of Employers' Liability Insurance

There is only one type but companies may offer extra services; you could inquire for each company's policy. The cost is dependent on various factors such as the category of your business, the length of time you have been in the business, and other vital business details. You can browse each insurance company's website to learn about the specifications and details.

Who are considered as your employees?

Persons are considered as employees if they work under contract in your business and that you pay them with corresponding deductions for their income tax and National Insurance. They are also your employee if you instruct them when, where and how to work and do not accept temporary replacements for them. Part time workers are considered as your employees.

Some companies may have modified the definition of the term "employees" so you can check with them and determine if your definition is congruent; otherwise, your Employers' Liability Insurance may not be valid.

Exemptions to the Employers Liability Insurance

• You are exempted if you do not have employees but only family members working for you.

• An employee who has at least owns 50% of the shared capital of the company is also exempted. The employee though, can purchase Employers' Liability Insurance if she wants to enjoy the benefits and assurance the insurance offers.

Significant Pointers:

• Be sure to purchase your Employers' Liability Insurance from a reputable company or valid provider, you can check the list of the Association of British Insurers on its website. You could also compare insurers to determine if there are good add-ons by any of the companies.

• Once you have obtained your Employers' Liability Insurance, you should display the certificate where employees could read it readily. If you do not display it, Health & Safety Executive (HSE) inspectors may fine you up to £1,000.

• You may want to keep a copy of the insurance policy even after the employee has left, because there are instances in which certain diseases only surface after quite some time.

• Read the insurance policy thoroughly before purchasing.

Companies offering Employers' Liability Insurance

There are several companies offering Employers' Liability Insurance, some of them are the following: AA Underwriting Limited, ABC Insurance, Acromas Insurance Company Limited (AICL), and Aberdeen Asset Management Life and Pensions Ltd.

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