Employer's liability insurance is a legal requirement in most cases and businesses must to ensure that they are fully covered at all times.
The Health and Safety Executive (HSE) doesn't only prosecute companies for physical accidents - they also ensure that employees are able to lodge a claim should one occur.
Last week the owner of 'Inspirations', a hair salon in Herne Bay in Kent, was fined for failing to provide liability cover for its employees. Although no accidents had taken place, the act of not renewing the cover, hence not protecting staff, was deemed serious enough to issue court proceedings.
Owner Rajan Patel took over the hair salon a year ago and never renewed the insurance. When a concerned employee found out about the lack of protection they contacted the HSE, which investigated the accusation. They discovered that Mr Patel had no valid Employers' Liability Compulsory Insurance (ELCI) certificate which meant that if a member of staff did have an accident which resulted in injury, they would be unable to pursue a civil claim against the business.
HSE Inspector Caroline Fullman said of the case: "Thankfully none of Mr Patel's employees suffered a work-related injury or illness that warranted a claim for damages, but had they done so they would have been denied a chance to claim the compensation as recompense for whatever pain and suffering they had endured. That is the purpose of ELCI. It is not a trivial optional extra, it is a compulsory requirement that is designed solely to protect employees."
For failing to provide liability insurance Mr Patel was ordered to pay a total of £6,900 in fines and court costs after he pleaded guilty to a breach of the Employers' Liability Compulsory Insurance Act 1969.