Employers Liability Insurance: What is it?
Employers Liability Insurance is required by law once one employee is taken on. The prescribed legal minimum is currently [2001] £5m of cover against bodily injury, illness or disease sustained in the course of employment.
The subsequent huge increase in litigation, the emergence of 'ambulance chasers' encouraging the 'someone must pay' culture, record-breaking court awards and a whole raft of new liabilities undreamed of when the legislation was drafted, have all added to industry losses.
Employers Liability insurance became a legal requirement in 1972 as a direct result of the 1969 Employers Liability Act.
As a result, employers liability cover has become increasingly expensive and, in some cases, impossible to obtain.
What else should I know?
As a result of increasing payouts for high-risk sectors many insurers have stopped offering employers liability cover to entire trade sectors, tarring many companies with the same brush.
Good risk management is the key to continued insurance and low premiums. No claims discounts of more than 10% are available.
Companies that are unable to obtain employers liability face two stark options. Either carry on trading illegally without insurance or close down.
Companies need to do more to reduce the risks inherent in their businesses by ensuring they have health & safety plans, hazard and risk management systems and a claims history to identify significant patterns.
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