The Law and Employers Liability Insurance
The Employers Liability (Compulsory Insurance) Act 1969 requires all employers in the United Kingdom to maintain employers liability insurance from an approved insurance company.
The minimum legal requirement for employers liability insurance is a limit of indemnity of £5,000,000, although in practice insurers issue policies with a standard limit of £10,000,000.
The law was introduced to attempt to ensure that employers of all sizes would have access to sufficient resources to meet their legal liabilities in respect of injury to employees arising out of and in course of the business.
In the absence of the insurance, employers would of course remain legally liable, but in many circumstances would not be in a financial position to meet their obligations. This would of course leave the injured party without appropriate compensation and in many cases reliant upon the state.
Employers responsibilities to hold employers liability insurance is overseen by the Health and Safety Executive, who have produced a guide on the requirements of the act available here.
Employers liability insurance is available from many insurance companies and specialist liability insurance brokers, generally in tandem with public liability insurance or as part of a more comprehensive commercial insurance package. More