Employers liability is an essential insurance policy for a business that depends on staff to function. Of course, a variety of businesses fit this description and there are many claims that employees can make against their employer – which is why, it’s important to select the right employers liability coverage for your company and seek the advice and guidance of an expert, such as Rigby Financial.
What is employers liability insurance?
Employers liability insurance is mandatory for most businesses. If you have a workforce of any kind, you are responsible for their health and safety and you need to be prepared for the worst. Accidents do happen. Employees may be injured at work or become ill as a result of the work they do and, in such situations, they are entitled to make a claim. This is where employers liability coverage comes into play. The policy will cover the cost of compensation up to a specified amount.
What does employers liability insurance cover?
A good employers liability policy will meet the cost of compensation for any physical injury, psychological condition or industry disease that has been sustained on or off-site – with the exception of those caused by a motor accident.
All current employers are covered by the policy, including those who work part-time and full-time hours. Ex-employees are also eligible – for incidents when they were employed at the company – as well as self-employed contractors, temporary staff, volunteers, apprentices and candidates taking part in work experience placements.
Do I need employers liability coverage?
If you employ staff as part of your business, the answer is yes – you must have employers liability insurance. Failure to do so will result in a substantial fine. The Health and Safety Executive (HSE) will charge you £2500 for every day you continue to run your company without insurance. You may also be fined £1000 if you fail to show employees and HSE inspectors your existing certificate.
There are some circumstances when employers liability coverage is not essential; for example, if you are a sole trader, a sole company director (with more than half the shares) or running a limited company without employees. However, even in these circumstances, you may find that some clients will stipulate employer liability insurance as a necessity within their contract.
Does public liability insurance cover employees?
The simple answer to this question is no. Public liability insurance is designed to cover claims that have been made by a third party – such as a client, customer, or supplier. It doesn’t cover claims made by your employees and, unlike employers liability insurance, it will not meet the cost of compensation for any injuries or illnesses suffered by your workers.
Who counts as an employee?
It sounds like the answer should be simple – an employee is someone that works for you – but this is something you need to consider carefully before choosing employers liability insurance.
Different rules apply to different types of businesses. For example, if you’re a sole trader, family members do not count as employees. If you run a limited company, they do. In some situations, contractors, subcontractors, freelancers, and interns can all be considered employees. Even temporary staff, who have worked for you for a few hours, fall under the same category.
There’s a lot to think about and, if you’re unsure about whether your workers are ‘employees’ – as classified by the HSE – it’s worth seeking the advice of a professional broker, such as Rigby Financial.
Do I need employers liability insurance for work experience students?
Yes – unless the student is a family member, you will need employers liability insurance for the duration of their placement. Most people will have an existing policy in place which covers them for such students. However, it’s always worth double-checking the policy documentation and – if in doubt – contact a broker, such as Rigby Financial, to make sure you have adequate coverage.
Does a contractor need employers liability insurance?
Employer liability insurance is a legal requirement for any company that employs staff – and contractors are no exception. Unless you are self-employed or work completely alone as a contractor, this type of policy is essential and – just like any other type of company or business – you will be charged a hefty fine if you fail to have the correct coverage in place.
Do I need employers liability insurance for employees who are based abroad?
Unless they intend to spend 14 consecutive days (or more) in the UK, an employee who is permanently based abroad will not need UK employers liability insurance. But it’s still important to check the law in the country where they are based. Some countries may ask for their own type of insurance policy and there may be certain measures you have to take to protect your employees.
How much employers liability coverage will I need?
The absolute minimum amount of cover, specified by the HSE, is £5 million. However, most insurance providers usually offer £10 million as part of their standard employers liability coverage. It’s also important to consider the risks associated with your business – and determine if this figure would be enough to cover the cost of compensation.
How much does employers liability insurance cost?
The cost of employers liability insurance is dependent on a number of variables, including the size of your company, the number of employees, and the nature of the work. It’s important to discuss these variables with a professional broker and identify the best policy for you and your specific needs.
It’s also possible to bring the cost of the policy down, by keeping your team up-to-date with official advanced health and safety courses, purchasing cover as part of a business insurance package (i.e. in conjunction with public liability insurance) or shopping around for the best possible deal.
Where can I buy employer liability insurance?
Employer liability insurance must be purchased from an authorised insurer – that is, a company who is working under the terms of the Financial Services and Markets Act 2000. Failure to do so may mean you are breaking the law – and the safest option is usually to seek the help of a professional broker, such as Rigby Financial. Our insurance advisors will help to identify the ideal employer liability insurance policy for you and they will recommend a provider that you can trust.
Contact Rigby Financial today
If you wish to know more about employee liability insurance or if you need help seeking out the perfect policy for your company, please feel free to get in touch. Either give us a call on 01744 886077 or send an email to enquiries@rigbyfinancial.co.uk and we will respond as soon as we can.
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