Employers' Liability

Employers' liability insurance is protection from claims from your employees or former employees for injury during their time working for you.  This will also cover any illness that they may suffer from as a result of the work they have done for you during their employment.  As an employer, you are responsible for the health and safety of your employees while they are at work. You should ensure that you have at least the minimum level of employers' liability insurance to cover against any claims. 

An employee is defined as anybody who works for you; meaning that if they are assisting you in your work on your premises, under a contract of employment, they are an employee.  This contract doesn't necessarily have to be in writing - it exists when you and your employee have agreed terms and conditions of employment.  It can also be implied from your actions and the employee's actions.  This contract will set out what the employer and the employee are expected to do.  Employees can be working on a full-time basis, a part-time basis, a trial basis, students on work experience, a person on probation, a self employed sub-contractor or even volunteering.  All of these would be technically employed by you, as they are working on your premises, under your instruction.

There are tax and National Insurance contribution differences that come with different ways of working.  To ensure that the legal and tax obligations are fulfilled, employers must recognize which category the people who work for them fall into.

Public liability insurance will cover your employees from claims made by members of the public against you, your employees or your business, but it will not cover you from claims made by your employees against you.

Employers' liability is compulsory.  You can be fined up to £2500 a day if you do not have suitable insurance.  The Health and Safety Executive enforces the law on employers' liability insurance.  Inspectors can check that you have employers' liability insurance with an approved insurer, and may ask you to provide a certificate of insurance and other insurance details.

You may need employers' liability insurance for someone who works for you where:

• You deduct income tax and national insurance from the money you pay them;
• You have the right to control when and where they work and how they do it;
• You supply their equipment and work materials;
• You have a right to any profit your workers make although you may choose to share this with them through performance pay, commission or shares in the company;
• You require that person only to deliver the service you employ them for and they cannot employ a substitute if they are unable to do the work; or
• They are treated in the same way as other employees, for example, they do the same work under the same conditions as someone else you employ.

You should check with one of our business insurance specialists to see if any of these instances apply to you, as you may be exempt from having employers' liability insurance:

• Most public organisations including government departments and agencies, local authorities, police authorities and nationalised industries;
• Health service bodies, including National Health Service trusts, health authorities, primary care trusts and Scottish health boards;
• Some other organisations which are financed through public funds, such as passenger transport executives and magistrates' courts committees;
• Family businesses; if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies;
• Companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company.

The legal requirement is that you are insured for £5,000,000.  However you should look at the risks of your own business and consider whether you a higher level.  At Assure UK we offer £10,000,000 as standard.

You must display a copy of your employers' liability insurance certificate where your employees can easily see it.  Assure UK will provide this certificate when you take out a policy or renew it. Since October 2008 you are allowed to display this certificate electronically, again making sure that your employees know how to find it and have reasonable access to it.

Since October 2008 there are no legal requirements for employers to keep copies of out of date employers' liability certificates.  However, employers are advised to keep a complete employers' liability record, in case of former employees getting ill from work they did for you.  Assure UK will keep a record of this for you.