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  • Why do I need employer's liability insurance?

    There is one very simple answer to this question. Employer’s liability insurance is a legal requirement.

    Employers’ liability insurance is a legal requirement

    Under the Employers’ Liability Act 1969, all employers are responsible for the health and safety of their employees whilst at work either on-site or off-site. In most cases, if you employ anyone whether full-time, part-time, contracted, voluntary helpers or self-employed under your supervision then you are responsible for their welfare. Don’t be confused by thinking that someone is not directly employed by you – even sub-contractors are classed as employees and come under your responsibility.

    Employers liability insuranceLegally employers’ liability insurance is required for every employer at a minimum level of £5million cover, however, you will find most insurers will only offer cover from £10million.

    The only types of business who are not legally required to have employers’ liability insurance are publically funded organisations, companies where the owner is the sole employee and owns 50% or more of the share capital, or family businesses whereby employees are closely related.

    What does employers’ liability insurance protect against?

    Ultimately employers’ liability insurance is required to protect employees. To ensure they are looked after as expected, and have compensation available to them should the worst happen. Any employee may become injured or ill whilst at work, or even years later, as a result of their work for you. In today’s society built around a claim culture and no-win no-fee legal services, putting forward a personal injury claim proposing that your business is liable is not difficult and should not be underestimated.

    Legal compensation costs relating to employers’ liability insurance can fall into thousands of pounds of damages, potentially debilitating your business not to mention your reputation should such protection not be in place. For most small businesses the expense of legal teams to negotiate disputes would not even be a possibility, and this is why a specialised insurance product makes sense. With employers’ liability insurance, your insurer can deal with any problems and must pay the full amount of compensation awarded by the Court, so you can rest easy and continue with business as normal.

    What happens if I don’t get employers’ liability insurance?

    Employers’ liability insurance is enforced by HSE and failure to insure your business is a serious matter. There are many cases where businesses are fined by HSE for failing to hold employers’ liability insurance up to the value of £2,500 for every day that you do not have cover in place and £1,000 for not displaying your certificate.

    Once you have your employers’ liability insurance cover in place you are required to legally display this where employees can easily read it; either on a wall in your office, or since 2008 electronic publication that can be easily accessed is sufficient.

    You will not legally need to keep hold of any past certificates of employers’ liability insurance, however, we would recommend that you do keep copies as diseases caused by exposure from your business can take many years to permeate.

    Don’t get caught out. Make sure you take out a comprehensive employers’ liability insurance policy today.

    For more information read our ultimate guide to Employer's Liability Insurance.

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