Employers’ liability insurance
The employment of staff is a major responsibility of any small business. Not least of these responsibilities is the health and safety of those employees whilst at work. If any employee injures him or herself, or even dies, at work, or contracts an illness as a result of working there, and the business is found to be at fault, then the business is also liable to pay compensation. Such claims can fairly easily exceed the entire worth of a small business and employers’ liability insurance is therefore a legal requirement for any business with employees (other than those where the owner is the sole employee or where employees are close family members).
By law, therefore, the required employers’ liability insurance must provide a minimum of £5 million cover and, in practice, most such insurance policies provide at least £10 million. This is designed to provide protection – for both the business and the employee – for even the most serious incidents involving the death or injury of an employee at work or compensation for an illness or medical condition contracted through that work. Such claims might include the provision for long-term medical care, for example, and even where treatment is provided by the National Health Service, these costs can be reclaimed from the liable business by the health service.
The official Health and Safety Executive carries out the duty of law enforcement with respect to employers’ liability insurance and is responsible for the prosecution of cases where the relevant insurance has not been obtained. Fines of up to £2,500 a day can be imposed on employers who have failed to arrange the appropriate insurance and fines of up to £1,000 can be imposed on those businesses that fail to display the relevant insurance certificate or to produce one at the request of visiting Health and Safety Executive inspectors.
It is in the nature of such risks, of course, that claims can arise many years after the employee’s or former employee’s exposure to the work alleged to have caused a medical condition or illness. It is prudent, therefore, to ensure that full details of any employers’ liability insurance are kept for a long period of time. Any claims will be based on the period of time which it is alleged that the employee was exposed to the working conditions that gave rise to the illness and unless the employer can call on adequate employers’ liability insurance, then any claims for which the business was liable will need to be met by the business itself.
