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EMPLOYERS LIABILITY COMPULSORY INSURANCE - CONSULTATION

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Proposals which include updating the minimum level of insurance cover required by employers from o2m to o5m, have b...
Proposals which include updating the minimum level of insurance cover required by employers from o2m to o5m, have been published in a consultation document.

Announcing consultation on the Employers' Liability (Compulsory Insurance) General Regulations (ELCI), environment minister Angela Eagle said:

'Our first priority is to ensure that employers comply with their duties to ensure that their employees remain healthy and safe at work. And responsible employers will also assess all their liabilities and ensure they are able to carry or insure them. But it is vital to ensure that there is a minimum level of adequate resources available to compensate employees where their employers are liable for accidents and disease.

In these regulations we propose to update the minimum level of cover required by employers from o2m to o5m. We believe that this amount meets the objectives we set ourselves in reviewing the Act, and has the support of those we consulted on it. The new amount should provide an acceptable minimum level of protection for injured employees in the event of a foreseeable accident, be consistent with the cover which the insurance market is able to deliver and avoid employers having to take out unnecessarily expensive cover.

In addition we are proposing various changes to make it easier for employees to be able to understand the Certificate of Insurance which employers have to display.

We want to ensure that all employers follow the practice of the best and keep insurance certificates from previous years so that claims can be made more easily. This should also help deter unscrupulous employers who can currently avoid penalties for past infringements by delaying tactics.

We are also making changes which should help reduce bureaucracy for firms. We are proposing to exempt some of the very smallest firms from the requirement to hold insurance, as they stand little chance of being able to make a claim. This would apply to single member companies, and some other very small companies limited by shares or guarantee where there are only two members and one of them is the only employee. And we also propose allowing employers offshore to take advantage of modern technology in making certificates available to their highly mobile workforce. Other changes make clear in legislation what has been general practice for many years, so all those involved know what the legislation will and will not allow.

I shall also be looking for opportunities in primary legislation to amend the penalties under the ELCI Act to bring them in line with those under the Health and Safety at Work etc Act 1974. It is important to ensure that the penalties will act as a real deterrent for those who seek to avoid their legal obligations.'

NOTES

The Employers' Liability (Compulsory Insurance) Act 1969 requires employers to maintain a minimum level of insurance against their liabilities to their employees for bodily injury or disease sustained in the course of their employment. Under the Employers' Liability (Compulsory Insurance) General Regulations 1971 (S.I. 1971/1117) every employer is required to insure for at least£2m in respect of claims relating to any one or more of his employees arising out of any one occurrence. The requirements of the 1969 Act and its related regulations are enforced by the Health and Safety Executive.

These requirements have remained unchanged since the Act came into force on 1 January 1972. They have been reviewed over the past few years, following a consultation in 1995, and these draft regulations are the result.

Copies of the Consultative Document are available from:

Fran Love, Department of the Environment, Transport and the Regions, Health and Safety Finance and Operations Branch, 23rd floor, Portland House, Stag Place, London SW1E 5DF. Comments are required by 26 December 1997.

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