Staff may be a crucial component of your business - and if so, it's almost certain that you'll need to have employers' liability insurance in place. This is because the law requires all employers to purchase the cover, which is designed to provide you with financial protection in the event that an employee suffers injury or illness as a result of work.
The reason the law requires this is simple - as their employer, you're responsible for their safety. That means you can be held accountable for things that happen to them while they're at work, including accidents.
What is employers’ liability insurance?
Employers’ liability insurance is a type of cover that can protect you in the event that a member of your staff suffers illness or injury through carrying out their responsibilities at work. In this situation, there’s a chance that you could be held responsible for the accident, and the employee could bring a legal claim against you as a result. Employers' liability insurance could provide you with crucial financial protection, by covering costs such as legal fees or compensation that may need to be paid.
Let's consider a couple of examples:
- You run a café. Someone you've hired to help in the kitchen slips, falls and injures themselves while carrying some plates. In this instance, unsafe working conditions in your kitchen could be blamed for causing the accident, and you may have to pay compensation as a result. There’s a chance that you could also be ordered to pay for all legal fees related to the claim, including the employee’s.
- You’re an electrician, and you have a young apprentice working for you. While on the job, the apprentice fails to carry out necessary safety precautions, and suffers burns from an electric shock as a result. The accident could be deemed to be your fault, for instance if the apprentice decides to blame you by stating that you did not provide proper health and safety training. In this situation, you could be responsible for compensating the apprentice for the injury, as well as loss of earnings due to time they have had to take off work.
In both of these examples, the money that you need to pay could reach tens of thousands of pounds – which many small businesses may be unable to afford. Luckily, in both of the above events, a successful claim on an employers’ liability insurance policy could provide you with financial protection to cover all the subsequent costs.
Who needs employers’ liability insurance?
One of the key features of employers' liability cover is that it's a legal requirement for the vast majority of businesses that have employees, including apprentices or people on work experience placements. This means that there’s a very good chance you will be legally obliged to have employers’ liability insurance in place. Without it, you could be breaking the law, and you'll also be exposed to the risk of a maximum fine of £2,500 for every day the insurance is not in place.
Employers liability exceptions
While employers' liability cover is often compulsory, there are a few exceptions in which you won't have to purchase the insurance. These include:
- Businesses that only employ close family members (unless your family business is incorporated as a limited company, in which case the insurance is compulsory).
- Sole traders - providing you aren't incorporated into a business.
- The majority of public organisations, including government departments and nationalised industries.
- Health service bodies such as primary care trusts.
But, if you employ staff and none of the above exceptions apply to you then it's safe to say you'll need to take out this type of insurance.
Compare employers liability insurance
At Make It Cheaper Financial Services, we can include employers' liability cover in a competitively-priced insurance package that's designed specifically for your business.
We'll handle all the necessary paperwork to ensure we get the right policies for you, and we'll be on hand to help if you ever have to make a claim. Call us today on 0800 144 4808 to speak to one of our insurance experts.
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