Employers Liability Insurance is for the protection of owners against claims being made against them by their employees (crew and the like).
If an accident occurs to an employee (lets say crew member) on board the yacht and it can be proven that the owner is negligent (Note: the owner does not have to be on board at the time of the incident) then depending on the severity of the incident, a claim could be brought against the owner.
For yachts where the Third Party insurance is placed within the Hull policy, it is advisable to take out separate EL insurance. There are specialist underwriters who underwrite this class of business and we, as brokers, can source this cover.
However, when we place the Third Party with a P & I Insurer, the EL cover is part of the overall package of the P & I insurance.
In some countries, it is a legal requirement to have in place EL cover, to protect the employee should they have a legitimate claim, knowing that the owner has sufficient cover in place to meet awards made by the Courts and to cover the fees involved during the litigation process.
Example of such claim:
A Stewardess was walking through a companion-way with bags of rubbish. There was a hatch not secured, which came down onto her head.
The Stewardess successfully sued the owner and received a settlement of US$ 3 million from the owners’ EL underwriters.