Does employers’ liability cover death in service?

You may know that employers’ liability insurance is required if you employ anyone, but does the cover it provides extend to death in service?

What is employers’ liability insurance?

Employers’ liability insurance is designed to protect you and your business if a current or former employee becomes ill or suffers an injury as a result of working for you.

Employers’ liability covers the cost of any financial claim resulting from this type of incident. It will normally include the cost of legal fees if the case goes to court.

You are legally required to have employers’ liability insurance if you employ anyone, even if they are only part-time staff, temporary staff, trainees, or volunteers. You can be fined for every day you don’t have it.

Is death in service cover included?

If an employee dies as a result of working for you (due to injury, accident, or an illness) then employers’ liability insurance is designed to cover this too.

However, if an employee dies at work, and their death is in no way related to the fact they worked for you, then employers’ liability will not provide cover.

Is employers’ liability cover for death the same as ‘death in service’ benefits?

Employers’ liability insurance and ‘death in service’ benefits are different types of cover, which do not offer like-for-like benefits.

What are ‘death in service’ benefits?

These are a type of work benefit or perk offered by some employers. In the event of an employee’s death, a lump sum of money will be paid out – provided the employee was working for the business at the time of their death.

It doesn’t make a difference whether the death was caused as a result of working for the business. They just need to have been an employee at the time of death to qualify.

Sometimes, ‘death in service’ benefits are linked to company pensions. If an employee has ‘death in service’ benefits, their dependents will normally receive a pay-out in the form of a tax-free cash lump sum.

Is it compulsory for employers to offer ‘death in service’ benefits?

Employers do not have to offer ‘death in service’ benefits to employees.

If you are in any doubt as to whether ‘death in service’ is a part of the package of benefits you offer to staff, you should check with your accountant or payroll team.