Employers' liability insurance: defending claims for injury or loss

Employers’ liability insurance is required for any organisation that employs staff in any capacity. It may also extend to work carried out by individuals working a self-employed basis with the firm where the law considers that they are “de facto” employees and effectively required to be covered by employers’ liability insurance.

The purpose of the insurance policy is to provide indemnity to an organisation where an individual suffers personal injury or illness – and losses arising from that injury – as a direct consequence of their employment.

It is distinct from public liability insurance, which is used for protection from claims for injury or loss suffered by an individual who, for example, enters your premises or interacts with an employee or the business and suffers injury as a result.

Why do you need it?

If a business does not have employers’ liability insurance it can be exposed to the costs of not only the claim for compensation being made by the injured party, but also to the costs incurred by solicitors acting on both sides.

Employers’ liability insurance policies are required to provide legal expenses cover for the costs of defending claims and the policy will consequently meet not only a successful claim for compensation but the costs incurred by the claimant’s solicitors and the costs of the defending solicitors acting on behalf of the insured party.

In cases where minor injury occurs, and the case is litigated, the payment made to the injured party may be relatively small compared to the costs of their solicitors, awarded to the successful party.

Proving negligence

If an individual who you employ or with whom you work maintains that they have been injured as a result of negligence on the part of your organisation then the onus is on the claimant to prove that the employer has been negligent.

This applies to any incident involving an employee occurring after 1 October 2013. Prior to that date, the onus was firmly on the employers to demonstrate that they had not breached the Health & Safety Regulations governing the prevention of injury to employees at work.

Investigating and defending a claim

If a claim for injury is made as a result of an alleged failure on the part of an employer, a solicitor can help by providing advice in investigating the claim and advising on whether or not negligence on the part of the employer can be established by the claimant in terms of the known information about the incident.

We can review whether or not a duty of care existed to the employee in terms of the incident and if it could be demonstrated that it was reasonably foreseeable that such an injury would arise. If liability is to be accepted for the injury, we can assist in quantifying the claim to ensure that the claimant recovers the appropriate compensation as opposed to an excessively high amount. If the claimant is making a claim for, for example, lost earnings as a result of the injury, we can assist in quantifying that and placing a value on the anticipated costs of defending the claim.