Employers' liability insurance is required by law, but in any case it's smart protection for a business to have in place for protection against potential claims if one of your employees is injured or falls ill as a direct result of their work for you.
Employers’ Liability protects your businesses against claims for compensation by employees who have been injured or made ill as a result of their work for you. It does not reimburse you for your direct losses as a result of their injuries (i.e. retraining costs, losses to business income). For that you would need personal accident or key man cover.
How likely is it that you will need employers' liability insurance? Let's take a look at some statistics on the number of successful workplace injury and illness claims, as well as the number of workplace illnesses or injuries that occurred last year.
Employer's Liability and Workplace Injury and Illness Stats
|Workplace Illness and Injury Statistics|
|New employers' liability cases registered to CRU||89,461|
|Number of injuries reported via RIDDOR||69,208|
|Number of injuries reported to LFS||581,000|
|Number of illnesses reported to LFS||1,354,000|
Last year there were just over 2 million reported workplace injuries and illnesses in the UK. The majority of these (1.935m) were self-reported through the Labour Force Survey (LFS). The remainder—69,208—were reported by companies via the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR). While there are far fewer injuries reported via RIDDOR, these tend to be more serious than self-reported injuries.
Reporting Claims to CRU
Not all workplace injuries result in a claim, or a successful claim at that. How many workplace injuries and illnesses result in a successful claim? For that we can look at data from the Compensation Recovery Unit (CRU).
If an employee suffers accidental injury or illness due to work and successfully claims for compensation from their employer, the employer must notify the CRU of the details of your claim. So to get an idea of the number of employers' liability claims in the UK we can look at CRU data. (CRU also holds data for other types of liability claims such as motor or public liability.)
History of Employers' Liability Cases
So how many employers' liability claims are there each year in the UK? It fluctuates pretty significantly from year to year, but in 2018/19 there were 89,461 successful employers' liablity claims settled in the UK.
|Number of Employer Liability Cases Registered to Compensation Recovery Unit (CRU)|
So, in a year where there were 1.935m self-reported and 69k company-reported workplace injuries and illnesses, there were 89,461 claims settled. This means that roughly 4.5% of workplace-related employee injuries and illnesses end up with a successful claim against the company. In other words, around 1 out of every 22 injured or ill employees has a successful lawsuit against their employer.
Cost of Employer Liability Claims
How much does it cost a company if an employee is injured or falls ill due to work? The figures will vary significantly from situation to situation, but we can get an idea of general costs to businesses from the Health and Safety Executive (HSE).
According to HSE data, a fatal employee accident costs a business £99,700 on average. Non-fatal injuries come at a cost of £1,400 to the employer on average, but this depends on factors like the length of time a worker is out—when an employee in incapacitated for at least 7 days the cost is £5,100 on average, while shorter incapacitation cost around £110.
A workplace-related illness is typically more costly than an injury. The average workplace illness costs a company £4,000—but an illness keeping an employee out for 7 or more days costs £8,300 on average.
|Costs to Employers of Workplace Accidents and Illnesses|
|7 or more days absence||£5,100|
|Up to 6 days absence||£110|
|7 or more days absence||£8,300|
|Up to 6 days absence||£150|
While employee illness or injury has an even larger cost to the employee, the costs to a business can be debilitating—which is where employers' liability insurance comes in. And these figures on the costs and likelihood of workplace illness or injury help to explain the high cost of employers' liability insurance to businesses.