Employers Liability Insurance

How much Employers Liability cover will I need?

It depends on your business, and the risks to health and safety involved.

Cover should be at least £5 million, but most insurers offer cover of at least £10 million.

The legal minimum is currently (2007) £5 million of cover against claims for damage or injury made by employees for bodily injury, illness or disease sustained during the course of employment.

The 1969 Employers' Liability Act (Compulsory Insurance) Act of 1969 brought in the legal requirement for Employers' Liability insurance from 1972.

All employers must display a certificate of employers' liability wherever employed persons are covered by the policy.

How can I reduce Employers' Liability claims and costs?

In today's 'no win, no fee' climate, it's harder for insurers to offer cover at a price customers can afford.

The number of claims has increased dramatically as has the average cost of meeting compensation claims, with courts awarding higher amounts than previously.

According to the Association of British Insurers, for every £1 of premium income paid in the last 3 years, insurers have paid out £1.47 in claims.

The sums don't add up.

Insurance is all about predicting the risk of future claims but nowadays Employers' Liability Insurance has to cover diseases and illnesses - such as asbestosis - which weren't even known about when the insurance was taken out.

So companies need to actively reduce and manage the risks attached to their businesses.

Good risk management and sound health and safety procedures are the key to cheaper premiums.

No-claims discounts of more than 10% are available from some insurers.

Companies which can't obtain employers' liability insurance cover because of a poor claims history or a pattern of costly claims are faced with two stark options - either continue to trade illegally without insurance, or close down.