Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Insurance policy pay outs are generally outside the scope of UK taxation. Your employer's payments will be subject to tax in the usual way. You may, of course, loose your Seafarers' Allowance as the basic rule is [source: Gov UK web site]:
'To get the deduction you must have:
I am so sorry to have to serve you up a Curate's Egg.