EMPLOYERS’ LIABILITY
(COMPULSORY INSURANCE)
ACT 1969
A GUIDE FOR
EMPLOYERS
This guidance reflects the requirements of Regulations
which came into effect on 1 January 1999
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
Most employers are required by the law to
insure against liability for injury or disease to
their employees arising out of their employment.
This guide is intended to help you to
understand what is required. It is not a legal
interpretation of the Employers’ Liability
(Compulsory Insurance) Act and it has no
legal status. You should be aware that only the
courts can authoritatively interpret the law.
What is employers’ liability insurance?
You are responsible for the health and safety of your
employees while they are at work. Your employees may be
injured at work, or they or your former employees may
become ill as a result of their work while in your employment.
They might try to claim compensation from you if
they believe you are responsible. The Employers’ Liability
(Compulsory Insurance) Act 1969 ensures that you have
at least a minimum level of insurance cover against any
such claims.
Employers’ liability insurance will enable you to meet the
cost of compensation for your employees’ injuries or illness
whether they are caused on or off site. However, any
injuries or illness relating to motor accidents which occur
while your employees are working for you, may be covered
separately by your motor insurance.
2
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
Public liability insurance is different. It covers you for
claims made against you by members of the public or other
businesses, but not for claims by employees. While public
liability insurance is generally voluntary, employers’ liability
insurance is compulsory. You can be fined if they do not
hold a current employers’ liability insurance policy which
complies with the law.
Do I need employers’ liability insurance
if my employees work abroad or my
company is based abroad?
If any of your employees are normally based in England,
Scotland or Wales (including offshore installations or
associated structures) you must have employers’ liability
insurance.
You do not need employers’ liability insurance under
English law to cover any of your employees who are based
abroad (eg If they are on secondment). However, you
should check whether the law in the country where they are
based requires you to take out insurance or take any other
measures to protect your employees.
If any of your employees are normally based abroad but
spend more than 14 days continuously in Great Britian, or
more than seven days on an offshore installation, you will
need employers’ liability insurance under English law.
3
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
Which insurance companies can sell me
employers’ liability insurance?
You must use an authorised insurer. If you do not, you may
be breaking the law. You should check that your insurer is
authorised before you take out employers’ liability insurance.
Authorised insurers are individuals or companies working
under the terms of the Financial Services and Markets Act
2000. The Financial Services Authority (FSA) maintains a
register of authorised insurers. You can check whether a
company is authorised by searching their register on
www.fsa.gov.uk, or telephoning the FSA on 020 7676 1000
Can my insurance policy contain
conditions?
If you take out employers’ liability insurance, you will have
an agreement with your insurer about the circumstances in
which they will pay compensation. For example, the policy
will cover the specific activities that relate to your business.
There are certain conditions which could restrict the
amount of money your insurer might have to pay, which
you cannot agree and your insurer cannot impose. You
should make sure that your contract with your insurer does
not contain any of these conditions.
Your insurer cannot refuse to pay compensation purely
because:
you have not provided reasonable protection for your
employees against injury or disease;
4
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
you cannot provide certain information to the insurer;
you have done something they told you not to do (for
example, said it was your fault);
you have not done something they told you to do (for
example, report the incident);
you have not met any legal requirement connected with
protection of your employees.
However, this does not mean you can forget about your
legal responsibilities to protect the health and safety of your
employees. For example, you must carry out a risk
assessment, take practical measures to protect your
employees and report incidents. If your insurer believes that
you have failed to meet your legal responsibilities for the
health and safety of your employees and that this has led to
the claim, the policy may enable the insurer to sue you to
reclaim the cost of the compensation.
Can the insurer make me pay part of
any claim for compensation?
Your insurer must pay the full amount of any
compensation agreed with your employee or former
employee or awarded to them by a court. Your insurer
cannot impose conditions which make you, your employee
or your former employee pay part of any claim. However,
you can agree with your insurer that you will pay back to
them part of any compensation which they have paid to
your employee or former employee.
5
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
How much cover will I need?
You must be insured for at least £5 million. However, you
should look carefully at your risks and liabilities and consider
whether you need insurance cover of more than £5 million.
In practice, most insurers offer cover of at least £10 million.
If your business is part of a group, a policy for employers’
liability insurance can be taken out for the group as a whole.
In this case, the group as a whole, including subsidiary
companies, must have cover of at least £5 million.
You can have more than one policy for employers’ liability
insurance. However, the total value of the cover provided by
the policies must be at least £5 million. You should bear in
mind that the £5 million minimum level of cover includes
costs, so you may wish to purchase cover of more than this.
Do I need to tell my employees that I
have employers’ liability insurance?
When you take out or renew a policy, your insurer will give
you a Certificate of Employers’ Liability Insurance. This
must state clearly the minimum level of cover provided and
the companies covered by the policy. You must display a
copy of the Certificate of Insurance where your employees
can easily read it.
If you have employees working in the Isle of Man, Jersey,
Guernsey or Northern Ireland as well as in England,
Scotland or Wales you can use the same certificate in all
6
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
locations. However, you must check that this complies with
any local requirements as well as English law.
If your employees work on offshore installations or
associated structures, you do not need to keep a copy of the
certificate on every installation. However, if one of your
employees asks to see a copy of the certificate, you must
provide one as soon as possible and certainly within 10
working days of their request. You can provide a copy by fax
if this is easier for you.*
Does the law apply to me?
You need employers’ liability insurance unless you are
exempt from the Employers’ Liability (Compulsory
Insurance) Act. The following employers are exempt:
most public organisations including government
departments and agencies, local authorities, police
authorities and nationalised industries;
health service bodies, including National Health
Service trusts, health authorities, primary care trusts
and Scottish Health Boards;
some other organisations which are financed through
public funds, such as passenger transport executives and
magistrates’ courts committees;
family businesses, ie. If your employees are closely realted
7
- The requirements described in this paragraph came into force on
1 January 1999.
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
to you (as husband, wife, father, mother, grandfather,
grandmother, stepfather, stepmother, son, daughter,
grandson, granddaughter, stepson, stepdaughter, brother,
sister, half-brother or half-sister). However, this exemption
does not apply to family businesses which are
incorporated as limited companies.
Further exemptions from the need to have employers’
liability insurance are listed at section 3(1)(a) and section
3(1)(b) of the Employers’ Liability (Compulsory Insurance)
Act 1969, and Schedule 2 to the 1998 Regulations.
Do I need employers’ liability insurance
for all the people who work for me?
You are only required by law to have employers’ liability
insurance for people who you employ. However, people
who you normally think of as self-employed may be
considered as your employees for the purposes of
employers’ liability insurance.
Whether or not you need employers’ liability insurance
for someone who works for you depends on the terms
of your contract with them. This contract can be
spoken, written or implied. It does not matter whether
you usually call someone an employee or self-employed
or what their tax status is. Whether you choose to call
your contract a contract of employment or a contract
for services is largely irrelevant. What matters is the real
nature of your relationship with the people who work
8
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
for you and the degree of control you have over the
work they do.
There are no hard and fast rules about who counts as your
employee for the purposes of employers’ liability insurance.
The following paragraphs may help give you some
indication. However, if you have any doubts you should
seek legal advice.
In general, you may need employers’ liability insurance for
someone who works for you if:
you deduct national insurance and income tax from the
money you pay them;
you have the right to control where and when they
work and how they do it;
you supply most materials and equipment;
you have a right to any profit your workers make
although you may choose to share this with them
through commission, performance pay or shares in
the company. Similarly, you will be responsible for
any losses;
you require that person only to deliver the service and
they cannot employ a substitute if they are unable to do
the work;
they are treated in the same way as other employees, for
example, if they do the same work under the same
conditions as someone you employ.
9
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
In general, you may not need employers’ liability insurance
for people who work with you if:
they do not work exclusively for you (for example, if
they operate as an independent contractor);
they supply most of the equipment and materials they
need to do the job;
they are clearly in business for personal benefit;
they can employ a substitute when they are unable to
do the work themselves;
you do not deduct income tax or national insurance.
However, even if someone is self-employed for tax
purposes they may be classed as an employee for other
reasons and you may still need employers’ liability
insurance to cover them.
In most cases you will not need employers’ liability
insurance for volunteers. Although, in general the law may
not require you to have insurance for:
students who work for you unpaid;
people who are not employed, but taking part in a
youth or adult training programme; or
a school student on a work experience programme.
In certain cases they might be classed as your employees. In
practice, many insurance companies will provide cover for
people in these situations. If you have volunteers, students
10
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
or non-employed trainees working for you, it is advisable to
inform your insurance company and to consider carefully
whether you should have insurance cover for them. You
should also bear in mind that some of these people could
be classed as your employees when you think about the
amount of cover you need.
One difficult area is domestic help. In general, you will
probably not need employers’ liability insurance for people
such as cleaners or gardeners if they work for more than one
person. However, if you employ someone who works only
for you, you may be required to take out insurance to
protect them.
Do I need to keep copies of certificates
of insurance which are out of date?
You must retain for at least 40 years copies of certificates of
insurance which have expired. This is because claims for
diseases can be made many years after the disease is caused.
You can keep copies electronically if this is more convenient
than paper copies. You must make these available to health
and safety inspectors on request.
These requirements apply only to policies which were in
force on 31 December 1998 or later. However, it is still very
important to keep full records of your previous insurance
policies for your own protection in case any of your
employees make claims relating to injuries or illness caused
in the past.
11
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
What happens if I do not have
employers’ liability insurance?
The Health and Safety Executive (HSE) enforces the law
on employers’ liability insurance and HSE inspectors will
check that you have employers’ liability insurance with an
approved insurer for at least £5 million. They will ask to see
your certificate of insurance and other insurance details.
You can be fined up to £2500 for any day which you are
without suitable insurance. If you do not display the
certificate of insurance or refuse to make it available to HSE
inspectors when they ask, you can be fined up to £1000.
Where can I go for further information?
If you want further information and advice about anything in
this leaflet you should get in touch with your local HSE office.
You can find their address and telephone number under
Health and Safety Executive in the telephone directory.
If you need legal advice, for example, if you are unsure
about whether someone is your employee, you can go to a
legal centre or a Citizens’ Advice Bureau.
You can obtain copies of the Insurance Annual Report,
Employers Liability (Compulsory Insurance) Act 1969
(ISBN 0 10 545769 
and the Employers’ Liability
(Compulsory Insurance) Regulations 1998 (SI 1998/2573
ISBN 0 11 079725 6) from your local branch of The
Stationary Office or from any good bookshop. Or you can
12
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
order them by telephone from 020 7873 9090 and by fax
from 020 7873 8200. The text of the 1998 regulations can
also be viewed at the Stationery Office website at:
legislation.hmso.gov.uk/si/s … 982573.htm.
13
Further information
Department for Work and Pensions
Health Disability and Work Division
Level 2
The Adelphi
1-11 John Adam Street
London
WC2N 6HT
Tel: 020 7712 2171 (9.00am-5.00pm Monday-Friday)
Fax: 020 7712 2386
Website: www.dwp.gov.uk
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
14
Notes:
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
15
Notes:
E LC I A C T 1 9 6 9 - G U I D E FOR EMPLOY E R S
HSE priced and free publications are available by
mail order from:
HSE Books, PO Box 1999, Sudbury,
Suffolk CO10 2WA
Tel: 01787 881165 Fax: 01787 313995
Website: www.hsebooks.co.uk
HSE priced publications are also available
from bookshops.
For information about health and safety
ring HSE’s InfoLine
Tel: 08701 545500 Fax: 02920 859260
e-mail: hseinformationservices@natbrit.com
or write to HSE Information Services,
Caerphilly Business Park, Caerphilly CF83 3GG.
You can also visit HSE’s website: www.hse.gov.uk
This leaflet contains notes on good practice
which are not compulsory but which you may
find helpful in considering what you need to do.
This publication may be freely reproduced, except for
advertising, endorsement or commercial purposes. First
published 03/02. Please acknowledge the source as HSE.
HSE40 03/02 C1000
Printed and published by the Health and Safety Executive
Essentially. If you are asked/required/expected to do something as part of your job then you ARE insured. Even if it is something outside the scope of your training or abilities.
If you believe that some part of your job is inherently dangerous, either due to lack of training, protective equipment, or the need to place reliance on other untrained persons, etc, then the way to challenge it would be to request a Risk Assessment as a Health & Safety issue.
)