Choosing Employers’ Liability Limits

Employers’ liability (EL) insurance protects your business from claims of negligence made by employees who have suffered an injury or ill health due to their work.

If your business employs workers based in England, Scotland, Wales or Northern Ireland (including offshore installations or associated structures), your business must carry EL cover to avoid substantial fines (with some limited exceptions).

Your business is required to carry at least £5 million of EL cover. However, depending on the size and the nature of your business, the minimum level of cover may not offer adequate protection. To figure out what your EL limits may be, here are six considerations:

1. Multiple claimants: Your EL limit applies to each claim individually. While the minimum limit should be able to handle a single claim, keep in mind that multiple claims can emerge from a single incident.

2. Nature of activities: Injuries that require continuous care tend to have larger EL claims than those involving death. Review what activities your staff participate in to better gauge the potential cost of an EL claim.

3. Inner limits: Learn your policy limitations to better insulate your business from risks.

4. Concentration of staff: If your staff are concentrated in one main area or several smaller ones, you may need a higher EL limit because an incident that affects one employee could easily affect them all.

5. Hazardous locations: Some locations— such as production lines, railways and construction sites—are more susceptible to incidents. These incidents are likely to involve a greater number of people.

6. Future circumstances: EL claims can be filed years after employees have ended their working relationship with your business. During this time, much could change to affect the final settlement values.