The Government is consulting on plans to create an Employers’ Liability Insurance Bureau (ELIB) - an 'insurer of last resort' for employees. An Employers’ Liability Tracing Office (ELTO) is also proposed, to help people track down their employers’ liability insurance policies.
At the moment, when a person is injured or made ill as a result of the negligence of his employer, he can claim damages from that employer. In turn, the employer is legally required to carry Employers' Liability (EL) insurance, and can make a claim against its insurer.
Difficulties arise, however, when an employee contracts a work-related illness or disease, such as mesothelioma, that only comes to light years after the original incident or exposure. In such a case it may be difficult to trace not only the old insurance records, but even the original employer or insurer, who may well have ceased trading.
It is a recognised problem, and one the insurance industry has already taken steps to tackle. A voluntary Code of Practice for tracing such policies has been in place since 1999, and has improved the situation a little. In fact, says Nick Starling, Director of General Insurance and Health for the Association of British Insurers (ABI), over 98% of employers’ liability claimants are currently able to claim if they have suffered an injury or disease caused by their work. In total, insurers pay out £1.5 billion a year in compensation.
But, he adds, "we recognise how important it is that anyone with an injury or disease claim caused through their work is able to trace their employer or its insurer to claim against."
The Government is also focused on helping the small number of claimants - 3,210 in 2008, it says - who still need help.
It plans to set up the ELIB as a fund of last resort to provide compensation where it has not been possible to trace an employer or insurer. The idea is similar to that of the Motor Insurers' Bureau, established over 50 years ago to compensate the victims of negligent uninsured and untraced motorists.
The ELTO, on the other hand, will manage an electronic database of EL policies and operate the tracing service. Initial plans are for the database to operate on a voluntary basis, but it is likely to become mandatory at some point, to ensure that all the relevant details are published by insurers. The Financial Services Authority is expected to carry out a consultation process on how this mandatory process will work.
The ABI is concerned about the proposals - and in particular the proposed ELIB. |
