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Employers’ Liability Certificate - What you need to know?

Your business needs an Employers' Liability Certificate (ELC) to protect yourself from the personal injury claims of your employees. Every hiring employer is liable for the actions of their employees which may lead to injuries or accidents within the company. Below we consider ways to acquire an employer's liability certificate and how it will help protect your business from illnesses, injuries, and other work-related incidents that may incur legal liability costs.

The Employers' Liability (Compulsory Insurance) Act 1969 needed most Employers' who employ staff in Great Britain to take out valid insurance cover against their liability for illness or injury to their employees.

What is the Employers' Liability (Compulsory Insurance) Act 1969?

Employers' liability certificate is integral to the UK's Employers'' Liability Act 1969. It's a certificate issued by an insurance company, certifying that the employer is insured against liability claims from their employees who are injured at work. The certificate also confirms that the employer has met the act's requirements and is liable to pay compensation for injury suffered by employees as a result of their employer's negligence. However, such exemption will be available only if he does not employ workers for more than 90 days during one calendar year. 

Who needs Employers'' Liability Insurance?

Any business owner or employer who needs to protect himself and the business from financial loss due to workers-related issues needs an employer's Liability Insurance. An employer liability insurance covers claims based on injuries to employees or their dependents caused by accidents in the workplace. The policy also protects Employers' against lawsuits from former employees who may have been injured while working for them. This policy provides liability coverage up to a specified limit for any injury incurred by any employee at work or while travelling as part of their job duties.

 How does the certificate work?

An employer's liability insurance certificate is the most basic type of insurance document for businesses in the UK. Employers' liability insurance is not only a legal requirement. It safeguards your business from financial loss if any of your staff suffer an injury at work or if they are involved in an accident which leads to damage to your premises or other property. An Employers' liability insurance certificate protects you against claims brought by staff or customers as a result of accidents on your premises or while employed with you. It also covers you against claims of personal injury to staff who have been hurt, protecting your building and property from theft, fire, flood and similar incidents. Claims can be brought against you by customers if goods sold fail to meet their expectations when bought in good faith, including faulty products and poor service.

What type of risks are covered under Employers' Liability Insurance?

In an Employers' Liability Insurance, there are many other risks that an employer can be held liable for other than workplace accidents or injuries sustained by employees. Some examples of these risks include:

  • The provision of dangerous or defective equipment or machinery.

  • Employees handling hazardous materials.

  • Injured third parties as a result of a defective product manufactured or sold by the employer.

  • Employee theft.

  • Employer negligence in hiring, supervising and retaining employees.

  • Employer negligence in failing to protect employees from workplace hazards.

What is the cost of Employers' Liability Insurance?

The cost of Employers' Liability Insurance comes from various factors, including the nature of your business, whether or not you employ staff, and how many people you employ. It also depends on what type of EL you need.

The most basic type covers liability arising from accidents connected with work activities, but other types cover more specialised situations. The amount you will have to pay for your Employers' Liability Insurance also depends on your company's size, your working environment and the historical claims record of your business. The main thing to remember when seeking Employers'' Liability Insurance is that premiums can change from year to year and may be affected by any changes in your business.

What if you can't produce a valid certificate?

If you don't have a valid Employers' Liability Insurance certificate, you can be fined up to £5,000 and even face imprisonment. But there are also other risks that come with not having the policy:

  • Your business could be shut down, even if it's a small one.

  • You could be personally sued for damages by your employees (or their families) for any injuries they suffer on the job.

  • It could become impossible for you to find staff because potential employees will know that you don't have insurance.

  • The government could randomly audit your business and refuse to allow it to operate unless you can produce proof of insurance.

Is an Employer allowed to pay compensation to a worker, and does this mean they do not need insurance?

The simple answer is that an employer must be insured against their workers' compensation. They will be liable to pay the employee compensation themselves if they are not. This can lead to an enormous cost and puts a company at risk of going out of business.

If the employer has insurance and a claim is made, then what happens is twofold. The insurance company will first look at whether the claim falls within the terms of the policy. If it does, it will be paid out as usual; if not, it will bounce back to the employer, who will have to pay the claim themselves without recourse to any insurance money.

If there is a successful claim in the employer's case, they may well try to seek compensation from their insurer. This could mean they don't have to pay out on the claim or only pay part of it depending on how much insurance cover they had at the time.

What should an employer perform if an employee is injured or gets an occupational disease? 

The first step is to keep calm and collect the facts. If the employee is hurt on the job, your immediate concern should be their health and well-being. While it's important to get the employee's medical treatment, it's also essential that you preserve the workplace scene and collect any evidence of how the injury occurred. This evidence could be crucial later, so don't try to clean up blood or other fluids yourself without first consulting with your insurance broker.

If you have a specific accident case management procedure you follow every time your employees get hurt on the job, you may want to follow it immediately. These procedures vary depending on your industry, but some general suggestions include keeping quiet about the situation until you've notified an appropriate supervisor.

To conclude,

Employers' liability insurance will secure your business against claims, preventing this kind of thing from occurring. You don't have to worry about accepting responsibility or losing a lot of cash. You can find out more information at our employer's liability insurance, which can help you with all types of commercial insurance, including Employers'' liability.