June 21, 2021

SME Business News

Small Business News UK

What is the purpose of the employers’ liability insurance register?

The employers’ liability insurance register is a list insurers keep showing all policies they have sold. Since April 1 2011 the Financial Conduct Authority (FCA) has ordered insurance companies to keep these records to help claimants trace the relevant insurers.

The new rules are the result of complaints from victims of workplace injury and illness who were finding it difficult to claim compensation. Victims who were often suffering years after the incident – and years after their employer ceased trading – would not know where to turn.

Since the turn of the century compensation claims for workplace accidents have rocketed and with people facing slow and costly processes, the FCA stepped in.

These registers are pooled together to create an Employers’ Liability Database (ELD). Many insurers log their policies with a centralised resource called the independent Employers’ Liability Tracing Office (ELTO). The ELTO holds 22 million policy records and is free for claimants to search. Members of the public can also email the ELTO at enquiries@elto.org.uk.

With the ELTO now holding more information from each insurer and each business with an employers’ liability insurance policy, searches that once took months can now take minutes.

Remember, employers’ liability insurance is legally required for almost all businesses hiring staff. It is workplace protection that guarantees financial help if a worker is ill, injured or dies while doing their job. Sometimes it can take years for an issue to arise, and an employee can find it difficult to contact their employer if they have left the role. It also helps solicitors working on the employee’s behalf track down the insurer to launch a claim.

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

It is the insurance company’s responsibility to update the employers’ liability register and this must be done within three months of a policy being issued, renewed, or a request is made to include details of the policy in the register, the FCA says. But that means businesses must now give more information to providers when agreeing to a contract.

Providers must make their employers’ liability insurance register available on their website or a tracing office. Insurance providers must also produce a report on their policies to the FCA once a year.

The FCA may investigate if it finds a provider has been banned from the ELTO for failure to meet requirements.

Insurers now need to hold more data on employees being covered by employers’ liability insurance.

Insurers signed up to the ELTO (of which most of the big-name providers are) now need policy holders’ ERN numbers and any subsidiary company information.

ERN stands for Employer Reference Number. This is individual to each business which deducts income tax and national insurance contributions from their employees’ pay and is given when a business registers with HMRC. Because ERNs are unique to each employer and written on tax documents available to employees, it helps make searches more efficient. ERNs can be found on P45, P60, P11/D and many payslips.

Secondly, the ELTO needs the names and ERNs of any subsidiary companies. This helps employees who may not know the name of a parent company.

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

ERNs are provided for businesses paying employees through Pay As You Earn (PAYE). However, some businesses do not have an ERN if they are registered in the Isle of Man or the Channel Islands. Or if the business pays all employees below the Lower Earnings Limit.