Many small and medium sized enterprises employ others to help run the business. In many cases, the employees might be regarded as the backbone of the business. In practically every case, employees might be regarded as one of the business’ most valuable assets.
As with all valuable assets, employees therefore require the protection of an appropriate level of insurance. In this case, that cover is called employers’ liability insurance.
The term helps to explain that it is the employer’s duty to provide such cover and the employer’s liability if an employee is injured at work or contracts an illness or other medical condition as a result of his or her employment.
The liability arises because, in addition to certain statutory responsibilities for the health and safety of employees, the employer also has a general duty of care for their well-being whilst at work. If the employer is negligent in this responsibility, a case may be made for substantial compensation to be made.
With all but a few exceptions, any business owner employing others in the running of the business is required by law to hold a minimum of £5 million employers’ liability insurance to meet any such claims.
Failure to have such cover could see you face fines of up to £2,500 per day for each day your employees are not protected. And, if you do not have employers’ liability cover and one of your employees is injured while carrying out their job, you face legal action and, potentially, a large claim for compensation, that you will need to fund from your business. Is it worth it?
Why arrange your employers’ liability insurance through us?
- We have the expertise and experience to make us industry specialists in this field – an expertise recognised by the more than 26,000 small business owners who entrust us with their insurance needs
- £5 million employers’ liability insurance is the minimum legal requirement, but we include £10 million cover as standard
- More than 150 different trades are represented in the various insurance packages we arrange
- 95% of our customers rate our service as “good” or “excellent”.
Why employers’ liability insurance?
If an employee is injured at work or contracts an illness or medical condition as a result of their job, the employer may be ordered to pay compensation for a breach of the common law duty of care owed to that employee.
The concept of a duty of care extends across a number of different areas and was established in English law as the “good neighbour” principle by a court decision in 1932. It established that an individual must take reasonable care to avoid acting – or failing to act – in a way that caused injury to someone who might be regarded as a “neighbour”. It is the extension of this principle of the “neighbour” that has come to include the relationship between an employer and his or her employees.
The Employers’ Liability (Compulsory Insurance) Act 1969, as amended, requires almost every employer to hold sufficient insurance cover to meet claims made by employees who have been injured or fallen sick because of their employment. The law currently requires a minimum of £5 million cover to be held. If the employer does not hold the appropriate insurance, he or she may be fined up to £2,500 for every day that the cover is absent.
You must also display in your business premises the insurance certificate and failure to do so may incur a fine of up to £1,000.
The exceptions to the requirement for employers’ liability insurance are businesses which have no employees and those which employ only close family members.
How much does employers’ liability insurance cost?
As with any type of insurance, the cost of premiums may vary quite widely from one insurer to another. Here at constructaquote.com, our aim is to ensure that you get the insurance cover you need at a competitive rate that represents good value for money.
The price of premiums is influenced by a number of factors, including:
- The number of people you employ
- The particular nature of your business
- Your past insurance claims history.
The insurance is typically designed to cover the cost of any claim made by one of your employees – or past employees – plus any associated legal costs.
Who needs to be covered?
To comply with the law, employers’ liability insurance needs to cover:
- Every permanent employee
- Seasonal, casual and contract employees
- Labour-only subcontractors
- Trainees and employees who are on apprenticeships
The definition of an employee includes anyone who has income tax and National Insurance contributions deducted from their salary, and where the location, hours and conditions of work are laid down by an employer, and where the employee cannot be replaced by the employer if they are unable to work.
It is important to note, however, that the law extends not only to those in full-time, paid employment, but also temporary staff, people on work placements and students. Volunteers, advisers, referees and marshals (at sporting events) are also included within the provisions of the Act.
In short, it is important for any small business to examine very carefully whether employers’ liability insurance is required, and if so, that the relevant level of cover is arranged to cover those in paid or voluntary employment in the business.
Need an employers’ liability insurance quote or advice? Then please contact us today - we will be only too pleased to help!