By Michael Nicholas, Risk & Claims Advisor at Sainsburys
Starting a business is an exciting journey. You’ve hired employees—whether full-time, part-time, or even volunteers—and things are running smoothly. But what happens if an accident occurs at work?
Imagine a scenario where one of your employees suffers a serious injury after slipping on a wet floor that wasn’t marked with a warning sign. They’re unable to work and decide to claim compensation for their medical costs and loss of earnings. Suddenly, you’re facing a legal claim that could cost thousands of pounds. Without the right protection, this could have a devastating impact on your business.
A Legal Requirement, Not Just a Safety Net
In the UK, Employer’s Liability (EL) Insurance isn’t just advisable—it’s a legal requirement. Under the Employers’ Liability (Compulsory Insurance) Act 1969, any business that employs staff must have a policy covering at least £5 million. If you fail to have the right insurance in place, you could face fines of up to £2,500 per day.
This insurance is designed to cover compensation costs if an employee is injured or becomes ill due to their work. It ensures that businesses meet their duty of care responsibilities while providing financial security to both employer and employee.
Safeguarding Your Business from Unexpected Costs
Beyond legal compliance, Employer’s Liability Insurance is crucial for protecting your business from the financial impact of workplace accidents. Compensation claims can cover:
- Medical expenses – covering hospital treatment, rehabilitation, or long-term care.
- Loss of earnings – if an employee is unable to return to work.
- Legal fees – if a claim goes to court, even if it’s later found to be invalid.
For a small business, these costs could be overwhelming. Even if you believe you’ve done everything right, legal proceedings can be time-consuming and expensive. Having the right insurance ensures that your business doesn’t take the financial hit alone.
Defending Against Unfair Claims
While Employer’s Liability Insurance provides compensation where it’s due, it also plays a key role in defending businesses against fraudulent or exaggerated claims. Your insurer will investigate the circumstances, ensuring that you’re not unfairly held liable for something outside of your control.
A Smart Investment for Any Employer
Having Employer’s Liability Insurance isn’t just about following the law—it’s about being prepared for the unexpected. It provides peace of mind, knowing that if something does go wrong, your business has the right protection in place.
If you employ staff in any capacity, this insurance isn’t just an option—it’s an essential safeguard that ensures both your employees and your business are protected.
