Nearly all businesses are required by law to have employers' liability insurance. This provides employers with the financial protection they need against those costly injury claims.
As an employer, it is your responsibility to ensure the health and safety of your staff; however if an employee suffers an injury at work, they might try to claim compensation if they believe you to be responsible.
Employers' liability insurance is designed to cover the cost of compensation and legal fees incurred from dealing with the claim. Remember accidents happen every day, so it is important you're appropriately insured.
Employers' liability law is enforced by the Health and Safety Executive (HSE). They will expect to see your certificate upon inspection and confirm it complies with HSE standards.
The fines for not having the valid insurance can reach up to £2,500 per day. You can also be fined £1,000 if you cannot display your certificate at their request.
You will be given a certificate of employers' liability insurance. According to the Employers' Liability (Amendment) Regulations 2008, this can now be displayed in electronic format, rather than being pinned to a notice board, as long as it is reasonably accessible to your employees.
The minimum level of cover demanded is £5 million. Most insurance policies however offer £10 million as standard. Although this may seem like an extremely large sum, you must consider that accidents often involve more than one member of staff. Legal representatives will also take into consideration the lifelong cost of care and lost wages when calculating damages.
The following employers' do not need their own employers' liability insurance:
The employers' liability insurance laws refer only to employees, however in practice this may mean people that you consider self-employed. Whatever their tax statuses or the nature of their contracts, the nature of your relationship and the amount of control you have over their work may determine whether the HSE consider them under your liability.
Things to consider when assessing the need for employers' liability insurance for someone who works for you include whether:
In most cases you will not need employers' liability insurance for volunteers or those who are:
It is important that you talk to your insurance company if you start to work with any volunteers or self-employed workers. They can help you stay compliant with the law and may even be able to add your volunteers/self-employed workers to your policy at no extra cost.
If you require further information on employers' liability insurance, you should speak to your local HSE office or the Department for Work and Pensions, both available online.
If you need independent legal advice regarding your company or the status of an employee, you should speak to a solicitor, a member of your local legal centre or the Citizens' Advice Bureau.