What Is It?

Employers Liability Insurance is insurance for small businesses which covers the owner in case any employee is injured or falls sick while at work. Employers Liability insurance is a compulsory insurance needed for the employers. Usually this type of insurance covers claims arising from accidents occurring due to negligence of the owner.

Except in a few cases employers must take Employers Liability insurance. These exemptions are applicable if

• You work as the sole employee of your organization and also hold at least 50% of the share of it
• You work as a sole trader and do not have any employee or have family members as employees

Employers Liability insurance is applicable if you hire temp, seasonal workers and occasionally hire staff for your business. So, check well before you decide whether you need Employers Liability Insurance or not. Your insurance adviser or the lawyer will be able to tell it to you.

What does it cover?

Employers Liability Insurance will cover the expenses you need to incur to compensate for any injury or illness of the employees. It covers injuries and illness caused on or off site. Employers Liability insurance only covers your employees, but it does not cover claims by third parties against you. Injuries due to motor accidents are not covered by Employers Liability Insurance but are covered by a motor insurance policy.

Generally, Employers Liability Insurance covers employees against illness or injury while at work. The word “employee” has specific definition here. Someone is described as your employee if:

• Contributions and income tax are deducted from their salary paid by you
• You can decide where, when and how they work
• No substitute is employed on their behalf by them

Small businesses should always opt for it because it can safeguard their financial position in case any claims arise. Many small companies went bankrupt because they did not opt for Employers Liability Insurance and later had to pay for claims by employees for injuries. So to avoid any such situation in future, it is always better to get cover for such problems.

How much cover do you need?

The minimum cover that you should have in Employers Liability Insurance vary depending on your business. It may also vary based on areas you do business. Proper cover is essential for you in case of Employers Liability Insurance.

When Can an Employee File a Liability Claim against an Employer?

In the following situations, an employee can file a liability claim against the employer:

• If there is any discrepancy in wages
• Wrong calculation of the working hours
• Work related accidents which causes death or injury
• Illness or disease resulted from faulty work practices

How to get a quote

Employers’ liability insurance is a must for many businesses and so you will find competitive quotes for such insurance. Before you decide on any particular insurer to get cover under Employers Liability Insurance, you should check well about the insurer. It is always better to get insurance from specialized insurers who work in the field of Employers Liability Insurance. Check out different quotes before you settle for one.

Employers Liability Insurance covers any legal fees and compensation costs incurred in the event of an employee falling ill or getting injured at work. This type of insurance will also cover an employer in the case of a death of an employee. Employers Liability Insurance is a mandatory insurance. One of the only exceptions for obtaining this type of insurance is if you are your only employee, or if you only employ your close family members in your business. However, even if you have only one employee, other than yourself or your close family member, in your business, you are still obligated to have Employers Liability Insurance by law.

Employers Liability Insurance is mandatory in most countries around the world, including the USA, Great Britain, etc.

If an accident does happen and your employee or employees decide to pursue you in the courts, your insurer will pay for all of the costs incurred, including legal fees, medical fees and so on.

The outcome of the claims, based on the Employers Liability Insurance, will largely depend on such factor, as who was at fault for the negligence – the employer or an employee. This particular factor could either decrease your costs or totally eliminate them, in cases which your employee was completely at fault for getting injured due to solely to his/her own negligence.

Do I Really Need Employer Liability Insurance?

Not having an Employers Liability Insurance policy is punishable by a large fine for each day, when you did not provide this type of insurance to your employees. Not having Employers Liability Insurance coverage may not only incur large fines, but it may also result in your business getting permanently shut down by health and safety agencies.

Your Employers Liability Insurance certificate also has to be compulsory displayed and/or accessible for your employees to view. You may display a photocopy of the insurance, pinned on an information board in your business building, or you may decide to place a scanned copy of the insurance document on your website, etc.

What Exactly Does It Cover?

Employers Liability (EL) Insurance only covers your employees, but it does not cover third parties of the public. For example, if someone, other than your employee, gets injured on your premises, it will not cover the incurred costs. In order to cover these types of costs, you would need to also get public liability insurance coverage.

It also does not cover you against being sued for such claims as wrongful termination, sex discrimination etc.

Do make sure that your insurance is issued by an authorized insurer. In case it’s not, you may be at risk of breaking the law. The costs of the EL insurance premiums also vary so do make sure to compare premium costs from several insurers.

The Benefits Of Employer Liability Insurance

Employers Liability Insurance will protect you from having to pay from your own pocket for any costs, resulting from any of your employees getting injured in the course of their employment. It protects both – the employee, who may be temporary unable to work, and the employer, who would be able to cover the incurred costs with the aid of the insurer.