Every employer is responsible for the health and safety of the employees while they are at work. His primary duty is to establish a safe working environment so as to prevent workplace accidents. Despite taking appropriate preventive measures, if any employee gets injured, the injured has all the rights to sue the employer making him legally liable for the injury. In such cases, the employer needs to compensate the employees for costs of hospitalisation, along with the legal costs. Since accidents are inevitable at workplace, it is sensible on the part of the employer to purchase insurance that enables him to meet the costs of compensation.
Employers' liability insurance protects businesses from liabilities. Let us discuss about this insurance and its benefits.
Who requires employers' liability insurance?
Employers' liability insurance is required by companies that employ people to work for their organization. Even if the company has only one employee, it still requires employers' liability insurance. In Ireland, it is mandatory for every company to take employers' liability insurance.
Most employers ignore this policy thinking that they do not have any employees. But, according to Health and Safety Executive (HSE) Ireland, any person becomes an employee of an organization, even if he enters into a contract of service or if the PAYE (pay as you earn) deductions are made from his wages or if the employer has a control over when and where the employee carries out his work.
Exemptions in taking the policy
Though employers' liability insurance is mandatory for every company, there are a few exemptions. Public bodies like government departments and local authorities, police and health authorities, non-limited companies which have the owner or his family members as employees, sole traders and partnerships with only one employee, where he owns at least 50% of the issued share capital in the company, are exempted from taking compulsory employers' liability insurance policy.
Level of cover required
As per the law, every employer must have employers' liability insurance worth minimum of £5 million. If the risks and liabilities associated with the business are more, the company requires more cover. As many insurance companies automatically provide a cover of at least £10 million, there is nothing to worry about it.
Each employer will receive a certificate from the insurer after purchasing the policy. This copy should be displayed in the facility, making it visible to employees and the same needs to be present when asked by Health and Safety inspectors.
Things covered under employers' liability insurance
Employers' liability insurance covers all those claims of liabilities which are likely to come against the employer, say, when an employee meets with a fatal accident or suffers from an illness while working. By and large, the insurance covers expenses incurred by the injured, legal and hospitalization expenses.
Benefits of taking the policy
The benefits of taking this insurance are as follows:
• Serves the legal obligation: First and foremost, as employers' liability is compulsory in Ireland, purchasing the same fulfils the legal requirement. Else, while failing to purchase insurance leaves you with huge fines of £2,500 for each day, failure to display the certificate may attract £1,000 fine.
• Guaranteed financial security: The insurance from a reputed insurance company protects you by offering a cover for a wide range of risks. Having taken this insurance, you need not worry about any costs in case any employee meets with an accident. Employers' liability insurance, thus, saves businesses from becoming bankrupt.
• Financial assistance to employees: This insurance not only saves the employer from bearing the compensation amount, but also enables employees to have financial assistance in times of need. Purchasing employers' liability insurance and displaying it in the office, imparts confidence and a sense of security in employees. It assures them that even though something goes wrong, the compensation helps them to meet the required costs.
Purchasing the insurance through a reputed insurance brokerage firm, which can effectively tailor it as per your company's requirements, is advisable. Employers' liability insurance is, thus, significant to employers as it not only protects them from financing liabilities, but also protects the employees by compensating for the expenses.