A certificate of employers’ liability insurance is legally required proof of an insurance policy. It should be made visible to all members of staff and if not, a business can be fined £1,000 if it is unable to prove its policy.
A certificate should show the level of cover a business has, the insurance provider, as well as the company’s name. It is a legal requirement to have a minimum of £5 million of employers’ liability cover.
Sometimes employers have more than one employers’ liability insurance policy. The total value of cover must be at least £5 million.
In other instances, businesses will be part of a bigger group. The certificate should make clear which policy covers businesses. It is acceptable for a group to hold a total of £5 million of cover, despite there being multiple businesses within the organisation.
Employers’ liability insurance must be taken out with an insurance company authorised by the Financial Conduct Authority. Businesses can see whether a provider is authorised on the Financial Conduct Authority’s register. If they do not use an authorised provider, they may be breaking the law.
What is an employers’ liability insurance certificate?
The employers’ liability insurance certificate is proof of policy for employees to see and know they are protected.
The certificate should be displayed in a common area used by all members of staff. Since 2008 the government has allowed employers’ liability insurance certificates to be displayed digitally, but workers should be made aware of where their company’s certificate can be found.
Health and safety and fire safety certificates also need to be available for staff members to see, so these are all generally displayed together.
The Employers’ Liability (Compulsory Insurance) Act 1969 states certificates do not need to be displayed in every offshore location, but if an employee asks to see it, the business must provide one as soon as possible. The Health and Safety Executive says this must be within 10 working days of their request. Electronic versions are permitted.
If the policy is renewed, it is a business’s responsibility to update its certificate.
When a business takes out its employers’ liability insurance, the provider will send the certificate out with policy documents.
Since 2008 there has not been a legal obligation to keep old certificates, but it can be prudent to have them on file. Employees, current or former, may make claims about incidents that took place years ago. It can often take years for problems to manifest. For example, an employee could struggle to recover from a broken bone sustained at work, or asbestos-related illnesses may only emerge years after exposure. In these circumstances, the business will need to prove it had valid employers’ liability insurance at the time of the incident. Otherwise, the business could be liable to pay the damages from its own funds.
How to get employers’ liability insurance
Almost all businesses use employers’ liability insurance, so any provider that offers business insurance should have employers’ liability insurance as part of its offerings.
However, employers’ liability insurance must be purchased through an organisation approved by the Financial Conduct Authority. If not, the business may be breaking the law. To check if a provider has been authorised, search on the FSA’s website or call its helpline on 0300 500 5000.
A business can go directly to providers to collect quotes for employers’ liability insurance, but these agents work for the provider to not offer the best quotes. Comparison sites are useful as providers will be competing for business. Independent insurance experts Nimblefins work with QuoteZone to provide up to five quotes to compare after businesses fill in a short form.
There is also the option of using a broker who may have access to better rates.
The cost of employers’ liability insurance will depend on the structure of the business and the type of work that is done. High-risk work that involves manual labour will have a higher premium than office-based jobs. The more employees a company has, the lower the cost per employee. But having just a handful of workers can appear expensive. Research by Nimblefins found the average cost of one employee is around £213 a year, while cover for two employees is about £354 and this rises to £753 for five employees (or an average of £150 per employee). The research looked at high and low-risk industries to find an average, so the reality may be slightly more or less depending on how dangerous the industry is and other factors.
Industries with higher-than-average reports of workplace injury last year were agriculture, forestry, fishing, construction, accommodation and food services, manufacturing and wholesale/retail trade, according to the HSE, so are likely to have higher premiums.
Meanwhile, public administration, defence, human health and social work and education were the industries with higher-than-average ill-health among employees.