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Most employers are required by the law to insure against liability for injury or disease to their employees arising out of their employment.
Employers are responsible for the health and safety of their employees while they are at work. Your employees may be injured at work or they, or your former employees, may become ill as a result of their work while in your employment. They might try to claim compensation from you if they believe you are responsible.
Employers’ liability insurance will enable you to meet the cost of compensation for your employees’ injuries or illness whether they are caused on or off site. However, any injuries and illness relating to motor accidents that occur while your employees are working for you may be covered separately by your motor insurance.  This should not be confused with indemnity insurance provided by Some H&S Consultancy Businesses
Public liability insurance is different. It covers you for claims made against you by members of the public or other businesses, but not for claims by employees.
While public liability insurance is generally voluntary, employers’ liability insurance is compulsory.
You can be fined if you do not hold a current employers’ liability insurance policy which complies with the law.
How much do you need?
You must be insured for at least £5 million. However, you should look carefully at your risks and liabilities and consider whether you need insurance cover of more than £5 million.
In practice, most insurers offer cover of at least £10 million.
If your business is part of a group, a policy for employers’ liability insurance can be taken out for the group as a whole. In this case, the group as a whole, including subsidiary companies, must have cover of at least £5 million.
You can have more than one policy for employers’ liability insurance. However, the total value of the cover provided by the policies must be at least £5 million.
You should bear in mind that the £5 million minimum level of cover includes costs, so you may wish to purchase cover of more than this.
Retention of Information
Employers, especially those in industries where long term ill health is a risk, should retain details of their Insurance Providers and Policy Numbers for 40 Years. Whilst this is no longer a legal requirement it will help with potential future claims should they be forthcoming.
Associated Legislation
The Employers’ Liability (Compulsory Insurance) Act 1969 requires that you have at least a minimum level of insurance cover against any claims.