Employers' Liability Insurance
When it comes to ensuring the safety and longevity of your business and its employees, it can start to feel like there exists a never-ending supply of insurance products that are required to keep your company protected should the worst happen; public liability, directors and cyber, to name a few.
Whilst those aforementioned policies might not be necessary for your business depending on the size of your operation, employee liability is a rarity in that it is essential for your company as soon as you employ one or more people. Here, we break down why employee liability insurance is far from optional for your business:
Do I really need employee liability insurance?
If you employ one or more other people, yes! This insurance is compulsory by law and can carry hefty fines by the government should your company not have it in place. This can include a £1000 penalty if you cannot produce the certificate on request or display it in your place of work and a potentially crippling £2,500 fine for every day that you do not have the insurance in place.
Just in case that wasn’t enough, it’s worth pointing out that these penalties can be backdated to periods where such protection wasn’t in place. With that in mind, it certainly isn’t worth running the risk of not having employee liability for your business.
Who and what does employee liability cover?
The policy protects every employee that has their hours or location chosen for by your business, regardless of whether they are paid or not. This can cover permanent, contract, part-time, temporary, volunteer or student workers.
In terms of the protection provided, employee liability will offer assistance with paying compensation to employees who suffer an injury or illness as a direct consequence of any activity that your business carries out; for example, a fall from a faulty ladder. The protection would also be in place should a former employee make a claim against you.
Are there any exceptions?
Family businesses are exempt from requiring employee liability, so should you run a shop or restaurant, you would not need such a policy in place and would not be at risk of a fine.
How much cover could I need and how is it calculated?
Small-to-medium businesses must have a minimum of £5m cover as a legal requirement, with most providers offering cover of at least £10m.
The policy is determined by looking at the industry that your business is in and how great the risks are to your employees; the size of your business, i.e. how many people are in your employ and the history of your company. This could look at the amount of time that you’ve been trading for and any past claims.
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