Employers are responsible for the health and safety of their employees while they are at work.
Most employers are required by the law to insure against liability for injury or disease to their employees arising out of their employment. Your employees may be injured at work or they, or your former employees, may become ill as a result of their work while in your employment. They might try to claim compensation from you if they believe you are responsible. The Employers’ Liability (Compulsory Insurance) Act 1969 ensures that you have at least a minimum level of insurance cover against any such claims.
Employers’ Liability insurance will enable you to meet the cost of compensation for your employees’ injuries or illness whether they are caused on or off site. However, any injuries and illness relating to motor accidents that occur while your employees are working for you may be covered separately by your Motor insurance.
Whether or not you need Employers’ Liability insurance for someone who works for you depends on the terms of your contract with them. This contract can be spoken, written or implied. It does not matter whether you usually call someone an employee or self-employed or what their tax status is. Whether you choose to call your contract a contract of employment or a contract for services is largely irrelevant. What matters is the real nature of your relationship with the people who work for you and the nature and degree of control that you have over the work they do.
The Health and Safety Executive (HSE) enforces the law on Employers’ Liability insurance and HSE inspectors can check that you have Employers’ Liability insurance with an approved insurer for at least £5million. They may ask to see your certificate of insurance and other insurance details.
You can be fined up to £2,500 for any day which you are without suitable insurance. If you do not make your certificate of insurance available to HSE inspectors when they ask, you can be fined up to £1,000.
In the event that you or your business injures a third party or their property, Public Liability insurance provides financial protection against damages that might be awarded in a lawsuit which can include loss of earnings, future loss of earnings and depending on your insurer’s policy wording, areas such as legal fees may also be covered.
The necessity for this insurance type is not limited to those that partake in manual works or to those that generally work away from their own premises; for example, it may be appropriate for your business to attend a trade show or present a sales pitch on site, during the event a third party is injured and your company’s involvement in the incident that occurred is called into question.
If you visit a client’s premises or have access to their equipment, such as IT systems, then it’s worth considering buying Public Liability cover because if you inadvertently damage their property, you may have to pay for repairing or replacing it.