The insurance industry is filled with terms that can trip up anyone who’s unfamiliar with them. An ERN is the perfect example. If you’ve taken out Employers’ Liability insurance recently, it’s something you might have come across, but there are many who remain unsure of the ins and outs.

For this reason, we thought it would be useful to put together a complete ERN overview. Here, we explain what it is, where you get yours from, and why insurers ask for it. Read on to have your questions answered…

What’s an ERN?

In a nutshell, an ERN is your Employer Reference Number. It’s provided to every business that registers with HMRC, and identifies you as an employer for things like Income Tax and National Insurance.

An ERN is usually made up of two parts: a three-digit HMRC office number, and a reference number that’s unique to your business.

Where can you find yours?

When you register as an employer with HMRC, you’ll receive a confirmation letter. You’ll find your new ERN within this document.

If you don’t have a copy of the letter, or you’ve misplaced it, you can also locate your ERN on tax forms, payslips, your P45 or your P60. And if you still can’t seem to find it, contact your accountant – they’ll have copies of all the above documentation.

Why do insurers need it?

All insurers are obliged to log and store the ERNs of the businesses they provide Employers’ Liability cover for. This is so they can be traced for future claims in the event of an accident or a work-related illness.

Put simply, if a current or ex-employee raised a claim against your Employers’ Liability insurance, your provider would use your ERN to check if and when that person was employed by you, and what you were covered for at that time.

It’s particularly important for work-related illnesses, where claims can be made years later. In fact, there could be several insurance policies that need to respond to the same overall claim. ERNs reduce the workload so that individuals don’t need to track down every insurer involved when investigating the allegation.

How exactly does it work?

To get an idea of what an ERN does, take the following example:

A past employee was a copywriter within your business for a long period of time. Recently, they’ve struggled to type due to pain in their wrists. After visiting a doctor, they were diagnosed with repetitive strain injury.

Following the diagnosis, they visited a solicitor and brought a claim against your company for a work-related injury. Using the ERN, all relevant insurers over the period when the injury occurred can be traced, allowing the claim to be dealt with fully.

Working back from the ERN, insurers can accurately determine where else the claiming employee worked, as the injury might have happened in a previous role. This could potentially save you costs.

Can you be exempt from holding an ERN?

There are cases where you’re not required to have an ERN. Exempt employees include:

• Those who are paid as if self-employed
• Those who earn less than £118 a week
• Those working for a business based in the Channel Islands or the Isle of Man
• Unpaid volunteers

Stay in the know

Have you been asked for your ERN and need some advice? Don’t hesitate to speak to our friendly team here at RiskBox.

You can call us on 0161 533 0411, or fill in our online contact form and we’ll get back to you as soon as possible.

Author: Ryan Kershaw

Photo by Amador Loureiro on Unsplash