There is no United Kingdom product called employee liability insurance. People searching for it, and for employees liability insurance or employment liability insurance, almost always mean EMPLOYERS' liability insurance, which is the compulsory cover an employer holds against claims by its own staff. The name matters because the duty is precise: it attaches to the employer, it is enforced by the Health and Safety Executive, and it is one of the very few insurances a UK business must buy.
The policy that actually exists, and what it does
Employers' liability insurance answers for the employer's legal liability to pay compensation to an employee who is injured or made ill by work. The Employers' Liability (Compulsory Insurance) Act 1969 obliges an employer carrying on business in Great Britain to insure against that liability, and the 1998 Regulations set the minimum amount to be insured and the rules about the certificate. It is not cover for the employee to buy, and it is not a benefit paid to staff.
Who counts as an employee for this duty
The test is the working relationship rather than the job title or the tax treatment. Part time, casual, temporary and seasonal staff generally count, as do apprentices and, in many arrangements, labour only subcontractors working under your direction. Genuine self employed contractors running their own businesses do not, and volunteers sit outside unless the policy says otherwise. Getting this wrong is the most common reason a business believes it is exempt when it is not.
The certificate, and where it must be
The Regulations require the certificate of insurance to be available to employees, and they were amended to allow it to be displayed electronically where employees can reasonably access it. It must also be available to an inspector. This is administratively trivial and is checked in practice, so it is worth doing on the day the policy is issued rather than the day somebody asks.
What it is not, and which cover that is
It is not public liability, which answers for members of the public. It is not employment practices or legal expenses cover, which funds tribunal defence for claims about dismissal and discrimination. It is not personal accident cover for the employee's own benefit. Businesses that meant one of those three and bought employers' liability, or the reverse, are the reason it is worth naming the policy correctly at the outset.
Questions people ask about employee liability insurance
Is employee liability insurance the same as employers' liability?
There is no separate UK product called employee liability insurance. The cover people mean is employers' liability, which is the compulsory policy an employer holds against claims from its own staff.
Is employers' liability insurance compulsory?
Yes, for almost every employer carrying on business in Great Britain, under the Employers' Liability (Compulsory Insurance) Act 1969. The Health and Safety Executive enforces it and can penalise a business for each day it trades uninsured.
Do part time and casual staff count?
Generally yes. The test is the working relationship rather than the hours or the job title, and part time, casual, temporary and seasonal staff, apprentices and labour only subcontractors working under your direction usually fall inside the duty.
Does it cover unfair dismissal or discrimination claims?
No. Those are employment disputes and are funded by employment practices or legal expenses cover. Employers' liability answers for injury and work related illness.