Employers' Liability Insurance FAQ
When you have employees, their health and safety while at work should be of the utmost importance. To ensure that, all employers are required by law to obtain an Employers' Liability insurance so as to be covered in case there is a work-related injury or illness.
1.What is Employers' Liability insurance?
Employers’ Liability is a key type of insurance which safeguards businesses and any other type of employers from legal liability and damages if any of their employees sustains bodily harm, illness or fatal injury in the course of their employment.
2.How do I know if I need cover?
Every business employing staff for more than 8 hours per week is legally obliged to take out Employers’ Liability insurance. This includes businesses who employ subcontractors, temporary workers and trainees. It is also mandatory if you are a limited company.
3.What does Employers' Liability insurance cover?
It can cover compensation payments and legal costs should an employee decide to sue their current or former employer for any illness or injury they believe to have been caused by their work. Employers’ Liability insurance will help with covering the cost of settling and defending any claim made by an employee against your business, including compensation pay-outs and legal fees if the case goes to court. In the latter case, the compensation sum may also reflect factors such as medical costs and loss of income if the employee is rendered unable to work.
4.How much will Employers' Liability insurance cost?
This will depend largely on two factors - the number of employees you have and the nature of your business. If you employ more people and they are working in either a hazardous environment or with dangerous materials, it is very likely that your premium will be higher.
5. What happens if I employee new employees during the contract?
The common practice in Cyprus is that we update the number and categories of employees only at the renewal date. Therefore, during the year the insurance company does not update the policy. At the renewal day the employer declares how many employees were employed during the year. If this number of employees was significantly higher than the number that was declared at the issuance of the contract then the insured should pay additional premium.
Nevertheless, there are few exceptions. The employer has an obligation to inform the insurance company in case the number of employees increase by more than 75%.
In addition, the employer has an obligation to inform the insurance company in case he employees workers whose activities are not already included in the table with workers. The employer is obliged to do this only in case the new employees are involved in risky activities.
In this two cases the contract is immediately updated and the insurance company has the right to update the terms and the premium.
6. What jurisdictions does the employers liability insurance contract covers?
The employer liability contract covers exclusively employees registered in the social securities of Cyprus and whose activities are performed within the geographical limits of the Republic of Cyprus (excluding the British Bases and the northen part). According to the Cypriot legislation Cyprus insurance companies do not have the authority to handle employer liability claims filled outside Cyprus. The same thing can be said about foreign insurance companies that are not permitted to provide employers liability insurance to companies operating in Cyprus.
If you have any further questions regarding Employers' Liability or other types of insurance, do not hesitate to contact us.