Employers’ Liability (EL) insurance protects your business from claims of negligence made by employees who have suffered an injury or ill health due to their work. Unlike many other types of insurance, EL is compulsory. If your business employs workers based in England, Scotland or Wales, your business must carry at least £5 million of EL cover. However, this varies depending on the size and the nature of the business to insure.
To work out what your EL limits may be, here are 6 important things to consider:
- Multiple claimants – your EL limit applies to each claimant individually. While the minimum limit should be able to handle a single claim, it’s important to keep in mind that multiple claims may emerge from a single incident.
- Nature of activities – review what activities your staff are doing to better gauge the likelihood and potential cost of an EL claim.
- Inner limits – EL policies may occur limits such as incidents arising from terrorism, war or nuclear risk. Learn what your policy limitations are to better insulate your business from risks.
- Concentration of staff – if your staff are concentrated in one main area, or several small ones, you may need a higher EL limit as one accident may affect them all.
- Hazardous locations – locations such as production lines, railways and construction sites are more susceptible to incident, so identify whether you operate in a high risk, hazardous location.
- Future circumstances – an EL claim can be filed years after an employee has worked for your business. Therefore, you should annually review your EL policy to see what has changed.