Is employers’ liability the same as workers’ compensation?
What is workers’ compensation?
If an employee gets injured at work or falls ill, they may have to take time off work. In more serious cases, they may need a lot of time off work. It’s possible they may even be unable to return to work at all.
If the injury or illness was caused while working for you (rather than something that happened in their own time) they may be entitled to compensation.
If this is the case, the employee could claim for lost earnings and other expenses incurred due to the incident. If they take you to court, there will also be legal fees to pay.
Is worker’s compensation the same as accident and sickness insurance?
Accident and sickness insurance is a policy an employee or individual may take out. It will pay out if they can’t work due to sickness or injury, or if they lose their job. It doesn’t relate to injuries or illness caused by their work, but does relate to injury or illness outside the workplace.
Who pays workers’ compensation?
If the illness or accident is caused as a result of working for you and your business, you (as the employer) pay the worker’s compensation. The cost will be covered by your employers’ liability insurance.
Liability insurance is taken out by the employer to cover any successful claims for damages, compensation, and legal fees.
What happens if you don’t have employers’ liability insurance?
As an employer, you are legally required to have employers’ liability insurance. If you don’t have it, you can be fined up to £2,500 a day. You can even be fined for not displaying your insurance certificate.
If you are not insured, any claim for employee compensation you are required to pay will have to be covered by your business. Bear in mind: it is not uncommon for personal injury claims to amount to many thousands of pounds.
How much cover do you need and how much will it cost?
Employers are legally required to have at least £5 million in cover. Most standard policies can provide up to £10 million in cover. That may sound a lot, but claims can quickly add up to large amounts.
The cost of your insurance will be based on the number of employees you have and the nature of the work you do.