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Employer's Liability Insurance - Health & Safety (H&S) Management

Employers' Liability Insurance

The employer must take out an approved policy of employer's liability insurance with an appropriate insurer. This policy must cover bodily injury or disease suffered by employees arising out of, or in the course of, employment in Great Britain.

The insurance must be sufficient to cover £5,000,000 for claims by any one or more employees arising out of any one incident.

Such insurance covers the employer's negligence or breach of statutory duty as well as the negligence of fellow employees. It may well also cover the situation where a third party, who has been held liable by a Court for an employee's injury, does not pay the compensation within a certain period (e.g. six months).

As the legal requirement for insurance covers only employees, additional cover for directors, contract workers and the public may be prudent.

An employer's liability policy certificate must be displayed at each place of work where it can be easily read by employees. Since the 1st Ocotber 2008, following the commencement of the Employer's Liabilty (Compulsory Insurance) (Amendment) Regulations 2008, the display requirements have been satisfied instead if the employer liability insurance certificate is available in electronic form and is reasonably accessible to the relevant employees.

As with any policy of insurance, the insurer will require the employer to disclose all reasonable facts and to act as necessary to limit and reduce any risks or losses.

Premiums are usually based on a rate per cent of the employer's wage bill, with higher rates for more hazardous jobs. Failure to have employer's liability insurance cover can lead to fines of up to £1000 per day.

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