What is Employers’ Liability Insurance?
The first step of growing your business is recruiting new employees, however additional staff means additional risk. If you have one or more members of staff, employers’ liability insurance is a legal requirement.
Do I need Employers’ Liability Insurance?
If you’re self-employed or an independent contractor that works for other organisations there is no need to have employers’ liability insurance. However, if you’re a limited company with more than one director you will need to have employers’ liability cover.
Even if you employ short term staff, casual workers or contractors, you’ll need to have insurance. This will allow you to deal with any claims from employees who may have been injured or become seriously ill as a result of working for you.
You can reduce your risk by having good health and safety practices. Making sure you know the regulations for your industry and carrying out regular risk assessments can help prevent accidents which may result in a claim.
- If you don’t take out employer’s liability insurance, you could be fined £2500 for each day you don’t have it in place
- Make sure you have the correct number of clerical and manual staff, or any claims you make could be invalid
- Casual, part-time and temporary staff all count as employees
What does it cover?
Some illnesses take time to show symptoms. So, it’s possible that a former employee may claim compensation from you a long time after they’ve stopped working for you. Employers’ liability insurance will cover you against this, but you will have to keep all relevant documentation related to your insurance, even if it’s expired.
Employers’ Liability Insurance covers:
- Medical bills that may arise from a claim
- Legal fees that arise from a claim
- Repetitive strain injury, or musculoskeletal problems that arise as a result of working for you
How much cover do I need?
By law, you’re required to have an employers’ liability policy with a coverage limit of at least £5m. If you don’t have this in place you could be fined up to £2500 per day.
There are some exceptions to this rule, most public organisations and businesses that only employ close family members (if they’re not incorporated as limited companies) don’t necessarily need to have it.