Benefits of Employers’ Liability Insurance

May 4, 2023

Employers’ liability insurance is one of the most important types of business insurance. Should an employee suffer an injury or illness while working for you, and then claim compensation from you, employers’ liability insurance can help you to cover the cost.

Employers’ liability insurance isn’t just nice to have – it’s a legal requirement. Without it, you could face a fine of up to £2,500 for every day your business isn’t properly insured.

Here, we’ll explore the benefits of employers’ liability insurance, and how it can protect both your business and your employees.

1. Protects your business from unexpected legal and financial risks

Regardless of how much attention you pay to health and safety at work, injuries can still happen. And if your employee or ex-employee chooses to sue you due to an injury or illness caused by their work, you’d need to pay compensation. These compensation payments can be significantly expensive, and even if you won the court case you’d still need to fork out expensive legal fees. With employers’ liability insurance, your insurer covers the cost, which can protect your business from financial strain.

2. Covers the cost of employee injury or illness

Employers’ liability insurance will pay compensation if an employee or ex-employee is injured or becomes unwell because of the work they do for you. For example, if a factory worker tripped over some equipment that hadn’t been properly stored while at work, this may cause them a serious injury. They may then choose to sue their employer for this, and the court can order the employer to pay compensation to cover the cost of the injury, and any other damages. Without employers’ liability insurance, your business would have to find a way to cover the cost of compensation, to contribute to the cost of medical care and lost income, which could be detrimental to your business’ financial well-being.

3. Demonstrates compliance with legal requirements

Having employers’ liability insurance is compulsory for most businesses, because you’re responsible for the health and safety of your employees while they’re at work. The Employers’ Liability (Compulsory Insurance) Act 1969 requires every employer, unless exempt, to insure against liability for bodily injury or disease sustained by their employees while in their employment. You are required to have at least £5 million of cover from an authorised insurer. Without it, you can be fined up to £2,500 for every day you’re not properly insured.

4. Provides peace of mind for you and your employees

Insurance serves as a safety net against the unexpected. As an employer, you may try your hardest to avoid health and safety risks, but this won’t eliminate them completely. Employers’ liability insurance can give you the peace of mind that should an employee become injured or unwell due to an incident or accident at work, you’ll have financial support there should you need it.

5. Protects your reputation

The last thing you want to happen is your employee or ex-employee claiming compensation and your business not being able to afford it – which could be detrimental to your brand’s reputation. Instead, with employers’ liability insurance you’ll have the reassurance that should something go wrong, you have insurance to fall back on. That way, you’ll be able to cover any legal and compensation costs that may arise, to ensure your public image remains positive.

6. Helps your business to grow

As mentioned, employers’ liability insurance is a legal requirement. If your business is just starting out, making sure you have the right insurance will be another thing ticked off your list, so you can focus on taking care of day-to-day responsibilities.

7. Tailored coverage to suit your business needs

When getting your employers’ liability insurance, you’ll usually be asked a series of questions about you and your business, to ensure your policy covers everything you need it to. The application process should be straightforward – simply let your insurer know how many people you employ and what work they do for you, and you’ll get an insurance policy that covers all your needs. That way, should disaster strike, your business and employees will be taken care of.

Ready to protect your business?

As a business owner, your business isn’t just your source of income, it’s also the product of all your hard work – so you’ll want to know it’s well protected should the unexpected happen and you need some support. Get a quote today for your small business with Protectivity, whether that be personal trainer insurance, liability insurance for an event, a small dog grooming business.