How Lockdown Impacts Your Employers’ Liability Insurance

Under law, employers are responsible for the health and safety of employees while they are working. They have a legal duty of care towards their staff. 

Employers’ liability insurance (EL) covers businesses against compensation claims should an employee suffer a work related injury or illness. Under the 1969 Employers’ Liability (Compulsory) Insurance Act, businesses are required by law to have EL. Cover should be for a minimum of £5m. 

You must take out EL as soon as you become an employer. If you don’t, you could be fined up to £2,500 per day that you aren’t covered. 

All companies with at least one employee are legally required to have employers’ liability insurance. Therefore, you should have a policy in place. It may be, however, that your current policy does not take into account the new situation you and your staff find yourselves in. So, your existing policy may need changing to reflect the new ways of working.  

If you’ve got staff who are working from home, they will still need to be covered by your employers’ liability insurance policy. Most policies do cover employees working from any location. But, you should always check with your insurance broker to make sure this is covered in the policy wording. 

Employers have the same duty of care towards remote workers as those who work on site. Certain risks will be the same at home as they are at work. Risks such as those around workstations and display screen equipment. Employers may need to conduct a workstation risk assessment for their employees’ home working set ups. This would cover things like the employee’s desk, chair, lighting and computer equipment. As it’s not possible to visit your employees’ homes, this could be in the form of a self assessment, requesting your staff to complete a questionnaire to identify potential risks. You can find templates for free online. 

You should also advise any home working employees on how to avoid or reduce risks.

Other risks, not experienced in on site working should also be considered and covered in your policy. Longer term risks, for example, such as the impact on employees’ mental health and wellbeing. 

Regularly touching base with your employees is a good way to keep track of potential risks and guard against them where possible. 

According to the regulations, staff on temporary furlough are still legally employed. This means they are still entitled to their full legal rights as an employee. Therefore, you are legally required to maintain your employers’ liability insurance to cover those who are furloughed. 

If you fail to adequately cover for employees who are furloughed or working from home, you could be faced with prosecution or a fine. Not to mention, you could be liable for claims made by your employees.

If you have temporarily ceased operations due to lockdown, you will still need an active EL policy. You are still employing staff and there are still potential risks. So, it is better to be covered. 

If you have taken on temporary staff during the crisis, they will still need to be covered under your policy. 

If the current situation has led your business to change the way you operate, you’ll need to update your insurer, in case this impacts your policy. Many businesses are diversifying their offerings, such as pubs offering takeaways. So, it is important to check you are covered for these new activities. 

Additionally, if due to government guidance around avoiding public transport, staff are having to travel into work by car, you may want to check with your insurer around cover here too. While typically, commuting to and from work comes under the individual’s car insurance policy, there is now a new grey area, where this could be classed as ‘within the course of employment’ and therefore may fall under EL. 

During his 10th May public briefing, Boris Johnson updated the terms of the lockdown, encouraging those who can to work from home, and those who can’t, to return to work. Several industries, such as construction and manufacturing have since been slowly welcoming back workers to their premises.

While this may be a welcome development for many businesses, it is important to remember that the threat of infection is still there. 

Have you considered what might happen if an employee returns to work and contract coronavirus? As an employer, you may be liable for a claim. The Act covers ‘bodily injury or disease’. ‘Disease’ is likely to include coronavirus. You should ensure your policy will protect you against such claims. 

If you are planning on welcoming staff back into work anytime soon, you should be reviewing your health and safety policies to ensure appropriate physical distancing and hygiene measures are in place. 

Always keep your insurance provider informed as to how your business is managing the potential risks. They can advise you whether this will impact your cover. 

If you have any doubts or concerns about how your employers’ liability insurance might be affected during this time, contact Dover Street Insurance Brokers on 0208 057 4130 for advice.