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 most other types of insurance, EL is compulsory. If your business employs workers based in England, Scotland or Wales (including offshore installations or associated structures), your business must carry EL cover to avoid substantial fines.
By law, your business is required to carry at least £5 million of EL cover. However, depending on the size and the nature of your business, the minimum level of cover may not offer adequate protection. To figure out what your EL limits may be, here are six important things to consider:
1 Multiple Claimants
Your EL limit applies to each claim individually. While the minimum limit should be able to handle a single claim, it’s important to keep in mind that multiple claims can emerge from a single incident. Consider whether your EL limit can handle multiple claims at once.
2 Nature of Activities
In general, injuries – such as loss of hearing and continuous care – tend to have larger EL claims than those involving death. Review what activities your staff regularly participate in to better gauge the potential costs of an EL claim.
3 Inner Limits
Your EL policy will most likely have common limitations. In general, these limitations include incidents arising from terrorism, war or nuclear risks. Learn what your policy limitations are to better
insulate your business from risks.
4 Concentration of Staff
If your staff is concentrated in one main area or several smaller ones, you need a higher EL limit because an incident that affects one employee could easily affect them all.
5 Hazardous Locations
Some locations – such as production lines, railways and construction sites – are more susceptible to incidents. In addition, these incidents are likely to involve a greater number
of people. Identify whether you may have high-risk, hazardous locations.
6 Future Circumstances
An EL claim can be filed years or even decades after an employee has ended his or her working relationship with your business (claims occurring basis). During the time between
buying an EL policy and claim being settled, much could change to affect the final settlement values. For that reason, it’s best to annually review your EL policy.
RHA Insurance Services: Your Cover Expert
The Team at RHA Insurance Services is here to help you analyse your business needs and make the right cover decisions to protect your operations from unnecessary risk. Contact us today on 0203 960 2944 to learn more about the services we offer to protect your business.