What Is Employers Liability And Do I need It?
Employers’ liability insurance will help to cover the cost of settling and defending any claim made by an employee against your business. This includes compensation pay-outs and legal fees should the case go to court.
If an employee claim does end up in court, a compensation sum might reflect factors such as medical costs and loss of income due to the employee not being able to work. Employers’ liability will cover this cost up to the policy limit.
It might be vital to have an employers’ liability insurance policy in place as it’s a legal requirement for most UK firms. You could be held responsible for any injury your employees sustain while carrying out work for your business.
A policy covers all injuries, from what might seem like an innocuous trip or slip, to a long-term illness suffered because of their work. It could be important to note that claims can still be made after an individual has stopped working for your business – this is because symptoms may only become apparent after several months.
You can’t predict or even prevent accidents from happening, but you can safeguard your business from the financial repercussions. Employers’ liability cover can be a lifeline, especially for small businesses and sole traders who might not otherwise have access to the necessary funds.
As a result of the Employer’s Liability (Compulsory Insurance) Act 1969, it’s a legal requirement for most UK businesses to have employers’ liability insurance, meaning it can be essential cover if you have employees.
Whether you’re a sole trader, small business owner or part of a global empire, not having sufficient employers’ liability cover can lead to substantial fines. These could be up to £2,500 a day until you take out a policy.
So, what does the law say about different types of staff? There are different classifications and no two businesses are the same, so here’s a guide to the rules:
Contractors – you might not require an employers’ liability insurance policy if you’ve hired an independent contractor who doesn’t work exclusively for your business
Subcontractors – if a subcontractor uses their own equipment, tools and materials then they usually don’t need to be covered by a policy but if they will be using yours, you might require cover
Part-time employees – if you’re self-employed and employ someone else to help with your workload, even part-time, you will require a policy
Volunteers – you need employers’ liability cover in place if you employ volunteers
Temporary employees – it’s essential to have this cover for all temporary employees, including interns and students on work experience.
Apprentices – it’s also a legal requirement to have a policy in place for any apprentices you employ.
Circumstances can vary, so it’s always advisable to check before anyone begins work for your business, especially if you feel there might be grey areas.

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