Introduction to Health and Safety at Work

17.15 
Employers’ Liability (Compulsory 
Insurance) Act 1969 and 
Regulations 1998
17.15.1 Introduction
Employers are responsible for the health and safety 
of employees while they are at work. Employees may 
be injured at work, or they or former employees may 
become ill as a result of their work while employed. 
They may try to claim compensation from the employer 
if they believe them to be responsible. The Employers’ 
Liability Compulsory Insurance Act 1969 ensures that an 
employer has at least a minimum level of insurance cover 
against any such claims.
Employers’ liability insurance will enable employers to 
meet the cost of compensation for employees’ injuries or 
Summary of the main legal requirements
349
17.15 
Employers’ Liability (Compulsory Insurance) Act 1969 and Regulations 1998

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Introduction to Health and Safety at Work
350
illnesses whether they are caused on or off site. However, 
any injuries or illnesses relating to motor accidents that 
occur while employees are working for them, may be 
covered separately by motor insurance.
Public liability insurance is different. It covers for 
claims made against a person/company by members of 
the public or other businesses, but not for claims made 
by employees. While public liability insurance is generally 
voluntary, employers’ liability insurance is compulsory. 
Employers can be fi ned if they do not hold a current 
employers’ liability insurance policy which complies with 
the law.
17.15.2 Application
An employer needs employers’ liability insurance unless 
they are exempt from the Employers’ Liability Compulsory 
Insurance Act. The following employers are exempt:
➤
most public organizations including government 
departments and agencies, local authorities, police 
authorities and nationalized industries
➤
health service bodies, including National Health 
Service trusts, health authorities, Family Health 
Services Authorities and Scottish Health Boards and 
State Hospital Management Committees
➤
some other organizations which are fi nanced through 
public funds, such as passenger transport execu-
tives and magistrates’ courts committees
➤
family businesses, i.e. if employees are closely 
related to the employer (as husband, wife, father, 
mother, grandfather, grandmother, stepfather, step-
mother, son, daughter, grandson, granddaughter, 
stepson, stepdaughter, brother, sister, half-brother or 
half-sister). However, this exemption does not apply 
to family businesses that are incorporated as limited 
companies.
A full list of employers who are exempt from the need to 
have employers’ liability insurance is shown at Schedule 
2 of the Employers’ Liability (Compulsory Insurance) 
Regulations 1998.