Insurance

[mark2788]

Any self employed or partnership here, what Insurance does everyone have do you just have public liability or is there anything else you have to cover, only self employed or partnership though.

Thanks

 

[Green Pro Clean Ltd]

What is employers liability insurance, and is my business legally required to have cover?

Employers liability insurance is a type of business insurance policy that virtually all firms employing someone must take out.

As an employer, the health and safety of your employees when they are working for you is your responsibility. Having an employers liability insurance policy ensures that your business has a minimum level of protection should an employee get injured or become unwell while in your employment, and seek compensation from your business.

The fines for not having a suitable policy can be huge, so here’s what every business owner needs to know about employers liability insurance.

What is Employers liability insurance?

When employees are working for you, it is you, the employer, that is responsible for their health and safety. So if an employee is hurt at work, or develops a work-related illness, they might blame you and try to claim damages.

The legal requirement for employers to purchase employers liability insurance was introduced under The Employers’ Liability (Compulsory Insurance) Act 1969. The Act requires virtually all employers to have a minimum level of insurance to cover any claims for compensation from employees.

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.

The Health and Safety Executive (HSE), is responsible for enforcing the law on employers’ liability insurance.

When businesses are NOT required to have employers liability insurance

There are very few exceptions where the legal requirement for any firm with an employee to have employers liability insurance (EL insurance) is waived.

However, there are two scenarios where a small business or start-up may be exempt from having to buy employers liability cover, these are;

1. For Limited companies

If you are a director of a limited company, own at least 50% of the shares, and have no other employees then you are not legally required to purchase employers liability cover.

2. For unincorporated businesses (sole traders and partnerships)

If your unincorporated business, that is where the business is operated as a sole trader or a partnership, business employs only close family members then the law does not require you to have employers liability insurance.

HSE defines close family members as; husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister.

EL insurance is needed even if you only employ occasional or temporary staff

Even if you do not employ any full-time staff but do occasionally take on temporary or seasonal staff, you will still need to take out employers liability insurance.

If you’re not sure whether you need cover, a good guide is to consider whether you dictate when and where someone works, and whether you deduct their income tax and national insurance contributions. If the answer is ‘yes’, then they probably count as being your employee.

What is covered by employers liability insurance?

As the name suggests, employers liability insurance is designed to protect business owners and operators against some of the most commonly faced risks associated with taking on employees.

This usually includes illness and injury that occurs on business premises, or as a direct result of the individual’s working practices.

It may not include incidents that occur while driving, but these will usually be covered separately by the business’s motor insurance policy.

Employers liability insurance, as the name suggests, relates only to the individuals who are actually employed by your company, and not to any visitors to your premises. Look out for any potential risks at your workplace for anybody who isn’t an employee, such as members of the public or visitors to your premises, as you will need public liability insurance cover for this.

What’s the cost of employers liability cover?

All insurance is priced on a set of criteria such as your perceived level of risk, any history of claims made – or of going for long periods without making a claim – and the total amount of cover that you need.

The higher the potential payout, the more you’ll usually have to pay for your cover. However, it’s important not to cut costs too much in this area, and leave yourself liable for a substantial payout if the worst happens.

Strike the right compromise between your short-term budget and your long-term need for financial protection, and you not only make sure your employees are protected against monetary loss in the event of an incident; you also ensure that your business will be able to continue operating in such circumstances.

Most insurers will provide you with £10 million of cover automatically, which should be more than sufficient for your small business. The minimum level of cover required by law is £5 million.

 

[Den]

Hello green,

This is a interesting read the way this looks to me I could have my son employed by me without the the for liability insure I'm I reading this correctly.

Thanks

Den.

 

[Green Pro Clean Ltd]

As long as you're a sole trader then yes, you still need Public liability but not employee liability, if you are a Limited company however you will need both.

Only question is, is do you value your sons well being so little that paying the small premium to ensure he is covered not worth it to you?

Just food for thought.

 

[Den]

Understand what your saying I used my son as an example, my son will be a partner, maybe I should have explained myself clearer of course I value every member of my family, goes without saying who wouldn't? But for example I could have my Youngest son (28 years old) maybe for a couple of days help out if I was on holiday to do trad on downstairs Windows only.

Thanks

Den.

 

[Green Pro Clean Ltd]

I'm a window cleaner..... not an insurance authority.

All I can offer is a literal translation of the law as that's how I read it.