What is the employers' liability insurance register?

The employers’ liability insurance register is a database of all employers’ liability insurance policies sold to businesses since April 1 2011.

The Financial Conduct Authority made it a legal requirement for insurance providers to make this information public after a surge in compensation claims highlighted the difficulties in sourcing details to fight for damages. Despite employers' liability insurance becoming mandatory for British businesses in 1969, it wasn't until the 21st Century when claims became unmanageable. By 2008 there had been a six-fold increase in new compensation enquiries compared to 2000 according to the Employers' Liability Tracing Office (ELTO). And victims and their solicitors were finding it incredibly slow, tedious and costly to fight for justice.

The ELTO was set up as an independent body to create a centralised resource called the Employers' Liability Database, run by the ELTO.

It means insurers must collect more information from businesses, such as their Employer Reference Number, as this is a key identifier that employees can see on their P45 or P60, and makes searching for their employer’s insurance company much quicker.

What is a certificate of employers’ liability insurance?

A certificate of employers’ liability insurance is the written proof a business has taken out a policy. It shows the level of cover a business has, the insurance provider, and the company’s name. It is a legal requirement to have a minimum of £5 million cover although many have more than this if they work in a high-risk industry or in a large business.

The certificate of insurance must be visible for employees to see and so is therefore usually displayed in public areas of a place of work. Since 2008 businesses have been allowed to store certificates electronically somewhere all employees have access to, such as an intranet. But members of staff must be made aware of how to view it.

Failure to provide proof of employers’ liability insurance when asked by the Health and Safety Executive can result in a £1,000 fine.

Despite new rules in 2008 saying a business does not need to keep old certificates, it can be a wise idea as it makes it easier to settle a claim from a previous year. Employers’ liability insurance provides a business with funds to pay compensation and legal fees if an employee was ill, injured or died as a result of working for the policy holder. An employee may not realise the impact of their illness or injury until years down the line, and they may not even work for the company anymore. But the business will need to prove it had a policy in place at the time or risk having to pay the compensation out of its own funds.

Not all workers qualify to be covered by employers’ liability insurance, although some businesses choose to cover them anyway due to the sheer volume of claims made every year. The Health and Safety Executive estimates injuries and ill-health from working conditions cost £16.2 billion in 2019/20.

How to get your certificate of employers’ liability insurance

When an employers’ liability insurance policy is agreed the provider will send the certificate to the business along with its other documents.

It is important that when a policy is changed the certificate which is available to employees is updated. If this is not done, and instead an invalid certificate is visible, the business risks a £1,000 fine.

Whose responsibility is it to update the employers' liability insurance register?

It is an insurer’s responsibility to update the employers’ liability insurance register but they need help from the businesses they cover.

If a policy is first issued, renewed, or a request is made to include the policy details in the register, the insurance provider has three months to update its records.

Providers must also send the Financial Conduct Authority a report updating it on their sold policies once a year.

When a policy is sold insurers will need to ask for the business’s Employer Reference Number (ERN). This is found on payslips, P45, P60 and P11/D forms, meaning it is easily accessible to both employees and businesses, so should help speed up searches.

ERNs are provided by HMRC when a business registers to pay wages and deduct national insurance and income tax from their employees through Pay As You Earn (PAYE).

Insurance providers also need to know of any subsidiary company information with a different ERN. This is because an employee may not know the name of a parent company, and this can make it difficult to quickly track down the relevant insurance provider needed to make a claim.

Both of these will be made available to the public, including claimants, solicitors and employees.