It’s to cover you against claims from your employees if they are injured or fall ill at your place of work that makes employers liability insurance an essential investment. if you don’t have employees then you will most likely not need the insurance at all.

The insurance is complusory under the Employer’s Liability Compulsory Insurance regulations 1998 from statutory instrument number 2573 - amended in 2005 so that small companies with one employee are exempt - see below. This came into force on January 1st, 1999.

The insurance will cover your legal costs as well at the cost of any claim that is settled by the insurer. It covers against employers negligence. The NHS can also make a claim if your employee is taken to hospital including the cost of treatment and the ambulance if one is required.

The UK law states that employers must have cover of at least £5 million although most insurers provide cover well in excess of this value. Limited companies that have just one employee who also owns at least 50% of the business are exempt from ELI. Companies that do not have employers liability insurance can be fined £2,500 for each day they are without cover by the Health and Safety Executive (HSE) that enforces the law.

Your company must display the insurance certificate in a prominent place and if you do not your company can be fined £1,000. You’ll also need to keep the certificate for a massive 40 years just in case claims come in within that time for something that has occurred in your workplace. This regulation has been in force since 1998.

The certificate needs to state the name of the policyholder, the date of commencement of the insurance, the date of expiry of the policy and the value of the policy.

Other exempt organisations include most government organisations, local authorities and publically funded bodies including the commission for new towns, the qualifications and curriculum authority, the government, magistrates courts committees and any nuclear installation.

What type of cover would you expect ?

Generally all costs involved with the claim are covered but could include all legal costs under the health and safety at work act 1974, court attendance, temporary workers and cost of damages up to the value of the policy.

Some policies will exclude certain locations that are seen as hazardous such as dockyards, airports, offshore locations such as oilrigs. Other exclusions will include those that are likely to be covered by other insurance policies such as theft from motor vehicles and computer equipment as these should be covered by car insurance and buildings contents insurance, not installing alarm systems if requested to do so and general acts of god and terrorism.

Of course it’s best to consult the small print of any policy you may be signing up for and get and compare many quotes as you’ll likely have a policy excess to pay in the event of any claims.

Getting cover

The insurance is generally tailored to the type of industry you are in and may be different for tradesmen, shops, landlords, commercial organisations, offices and surgeries, businesses working from home, hotels and pubs. Shop around for your employers liability insurance to obtain the best deals.

Public liability insurance covers you against claims made by the public, customers, suppliers or anyone else that your business comes into contact with because of something you, your business or your employees have done.

These days with the compensation culture some claims could run into millions if a third party is injured.

The insurance generally covers the expenses incurred, the cost to put things right, legal costs and any general compensation claims. Most policies start at £1 million and it’s there because of the massive costs of the legal system and the fact that people claim for anything these days to get additional “free” money.

Companies will provide you quotes and these are based on your turnover, the type of business you are in (as the risk is different for different businesees) the the location of your premises.

It’s best to get a few quotes like with any insurance cover you are seeking to not only compare the premiums and the overall value but what else you may receive such as a free legal helpline to manage the aftermath of any claims. larger insurers may be better to deal with but smaller one may provide a more personalised service you may require.

You should get cover if people visit your premises even if you work at home. What would happen if someone fell over, got jumped on by your dog or something fell on them from the ceiling. They would likely attempt to claim on your insurance under the assumption that “every business would have it” - if you haven’t then the legal costs and overall compensation may be something you can not afford.

This is not legal advice and you should consult a professional and decide on whether public liability insurance is right for you and your business circumstances.