Every employer is responsible for the health and safety of employees while they are on the job. His primary duty is to establish a safe work environment to prevent workplace accidents. Despite taking appropriate preventative measures, if any employee is injured, the injured party has every right to sue the employer, making them legally liable for the injury. In such cases, the employer must compensate employees for hospitalization costs, along with legal costs. Since accidents are unavoidable in the workplace, it is wise for the employer to take out insurance to cover the costs of compensation.

Employers’ liability insurance protects businesses from liabilities. We are going to discuss about this insurance and its benefits.

Who requires employer liability insurance?
Employers’ liability insurance is required by businesses that employ people to work for their organization. Even if the business has only one employee, it still requires employers’ liability insurance. In Ireland, it is compulsory for all companies to take out employer’s liability insurance.

Most employers ignore this policy thinking they have no employees. But, according to Ireland’s Health and Safety Executive (HSE), anyone becomes an employee of an organization, even if they enter into a service contract or if PAYE deductions are made from their salary or if The employer has control over when and where the employee carries out their work.

Exemptions in contracting the policy
Although employers’ liability insurance is required for all businesses, there are some exceptions. Public bodies such as government departments and local authorities, police and health authorities, non-limited companies that have the owner or their family members as employees, sole traders, and companies with only one employee, where you own at least 50% of the issued share capital in the company , are exempt from taking out compulsory employer civil liability insurance.

Coverage level required
Under the law, every employer must have liability insurance to a minimum value of £5 million. If the risks and liabilities associated with the business are greater, the company requires more coverage. As many insurance companies automatically provide coverage of at least £10 million, there is nothing to worry about.

Each employer will receive a certificate from the insurer after purchasing the policy. This copy must be displayed in the facility, making it visible to employees and must be present when requested by Health and Safety inspectors.

Things Covered by Employers Liability Insurance
Employers’ liability insurance covers all liability claims that are likely to arise against the employer, for example, when an employee has a fatal accident or illness while working. In general, the insurance covers the expenses incurred for the injured, legal and hospitalization expenses.

Benefits of taking the policy
The benefits of contracting this insurance are the following:

• Complies with legal obligation: Firstly, since employers’ liability is compulsory in Ireland, the purchase of it complies with the legal requirement. Otherwise, while failing to buy insurance leaves you with huge fines of £2,500 for each day, failing to show the certificate can lead to a £1,000 fine.

• Guaranteed financial security: Insurance from a reputable insurance company protects you by offering coverage for a wide range of risks. Having taken out this insurance, you do not need to worry about any costs in case any employee has an accident. Employers’ liability insurance therefore prevents businesses from going bankrupt.

• Financial assistance to employees: This insurance not only prevents the employer from assuming the amount of compensation, but also allows employees to have financial assistance in times of need. Purchasing employers’ liability insurance and displaying it in the office conveys confidence and a sense of security to employees. It assures them that even if something goes wrong, the compensation helps them cover the required costs.

It is advisable to purchase the insurance through a reputable insurance brokerage firm, which can effectively tailor it as per your business requirements. Employers’ liability insurance is therefore important to employers as it not only protects them from financial obligations, but also protects employees by offsetting expenses.