I decided to write this blog after talking to a lot of new start-up companies who were looking for an insurance quotation for the first time. Security Insured always aim to give our clients as much information and knowledge as we can in order to help make obtaining your insurance quotation as quick and painless as possible.
Why does my ERN need to be declared?
In the event of an Employers Liability Claim it’s necessary to identify, quickly and efficiently, all the companies where the employee in question has worked. Employers Liability insurance claims can occur long after the alleged actual event (for example the mesothelioma claims relating to employee exposure to asbestos) and fumbling through the stacks of paperwork to find the relevant insurer is a time consuming and sometimes stressful exercise.
It’s hoped that the recent implementation of ERNs will streamline this process and make life a whole lot easier for both claimants and insurers alike. Your ERN is issued by HM Revenue & Customs (HMRC) once you have registered for PAYE for Employers.
What role does Employer’s Liability Tracing Office (ELTO) play?
Searches for Employer’s Liability Insurers will be undertaken by an independent industry body called the Employer’s Liability Tracing Office (ELTO). They will use a centralised database combining ERNs and information on Employers Liability policies to track down and match-up relevant insurers to companies on the receiving end of claims.
How could it benefit me?
Don’t view the ERN as just another piece of paperwork/documentation that you need to obtain, there is a significant benefit to you. EL insurance is a legal requirement for most companies with employees if you were to be faced with a claim, the ELTO can prove you had the insurance at the time you employed the claimant. This means your insurer foots the bill and you don’t.
What Does an ERN look like?
This reference is made up of two parts: a three-digit HMRC office number, and a reference number unique to your business.
If the number was issued prior to 2001 it will look like – 123/A45678
If the number was issued after 2001 it will look like – 123/AB45678
The first part of the ERN is 3 digits and this identifies the tax office number that deals with your PAYE for example 123. The second part of the reference comes after the forward slash and is your tax office employer reference, for example /AB45678.
You will find this reference on the yellow PAYE Payslip booklet supplied by HMRC. When this is done online barring any complications your ERN should be issued to you within 14 days.
What if I think I have lost my ERN?
It is important that you keep hold of you ERN, as you will need it regularly throughout the tax year. If you have lost the number, you will be able to find it on correspondence from HMRC relating to PAYE. It will also appear on any P45s or P60s for previous or current employees of which you have copies.
You could also speak to the HMRC over the telephone who should be able to confirm your ERN for you if you are having real difficulties.
Are any businesses exempt from having an ERN?
The only firms that are exempt are where the employer pays all their employees below the PAYE threshold (£503.00 monthly) or businesses registered in Guernsey & Jersey.
If you think you may be exempt, please call us so we can discuss this with you at any time during your insurance quotation..
Blog created by: Nicholas Hems – Security Insured