Construction insurance types

Employer's liability insurance (EL) is one of the few insurances required by UK statute. It provides an indemnity to an employer for its legal liability to its employees for death and disease or personal injury arising out of their employment.

If, for example, an employee falls off a ladder on a building site while in the course of their employment and it is shown that the employer is legally liable, the EL insurance will compensate the employee for the personal injury suffered.

It is mandatory for all employers employing staff within the UK to effect and maintain EL insurance. The limit of indemnity provided must be for a minimum amount of £5,000,000 in respect of any one claim. Higher limits are available and, with quantum payments increasing, consideration should be given to increasing beyond the £10m limit. The relevant regulations also require that a valid certificate of employer’s liability insurance is displayed at all locations where an employer has employees working. Where a contract lasts for more than one year it is important to ensure that satisfactory EL cover continues and that the policy(ies) are renewed with current certificates provided and displayed.

Most standard forms of contract in use currently require the contractor (and perhaps all subcontractors) to have EL insurance in place that at the very least meets the statutory requirements. Occasionally the contract conditions may stipulate a requirement for cover to be for an amount greater than the statutory minimum.

Employer’s Liability Tracing Office

The Employers’ Liability Tracing Office (ELTO) is an independent industry body comprising members who are employers liability insurers.

ELTO is a proactive move by the insurance industry to meet its obligations to help those who have suffered injury or disease in the workplace identify the relevant insurer quickly and efficiently. At the heart of this process is a centralised database – the Employers’ Liability Database (ELD) – which contains all new and renewed employers' liability insurance policies, old employers' liability policies that have new claims made against them and all successful traces from the current tracing service.

Insurers will require the Employer Reference Number (ERN) for the company insured and if applicable, each subsidiary of the company.