Employers Liability Insurance.
When isn’t an employee an employee?
Understanding the sometimes misunderstood.
Employers Liability Insurance is a cover that can sometimes be quite confusing, do you or do you not need it, this type of cover is a legal requirement and is usually purchased alongside public liability insurance.
Who actually is an employee?
Clearly if you employ someone and pay their PAYE NI etc, that is quite straight forward and generally understood, however when you have sub-contractors this can be at times a little more difficult.
Let’s take a builder as an example, a simple question, “how many people do you employ” answer None. Let’s ask the same question slightly differently, How many people do you have that carry out work for you? Answer 5.
Lets look at an example
Ok so let’s look at the difference, people tend to associate the word “Employ” as they are a direct employee, PAYE etc.
From an insurance perspective this is a little different, yes of course PAYE is a direct employee, however a Labour Only Sub-Contractor is also an employee on the basis that they work under your control, they may still have their own Public Liability insurance but they carry out work for you under your instruction and therefore you need to include them as if they were an employee.
No more confusion
You can possibly see where the confusion arises. The correct answer to the above example is of course 5, it makes no difference that they supply labour only to you and are self employed.
You may have heard of the term Bona-Fide sub-contractors, they still carry out work for you but they are different, these are better described in our Public Liability Insurance page.
Not for everyone
Employers liability can be complicated as we have seen, but there are certain types of people where you do not need employers liability cover, such as direct relatives for instance.
A word of caution though, just because there may be no legal requirement for certain individuals doesn’t necessarily mean that you shouldn’t cover them, after all they may be as much at risk as any other employee and why should they not benefit.
So what does Employers Liability Insurance cover
Cover is provided for claims arising from loss, injury, disease to an employee.
As an employer you have a duty of care to your employees to keep them safe, it doesn’t matter whether that is on a construction site, an office, a shop or a factory or anywhere where they are working and carrying out work for you the employer.
You have many responsibilities as an employer to ensure a safe working environment is provided, that’s not just a safe work place but additional responsibilities such as training.
Sometimes though with the best intentions and safe places of work, loss or injury to an employee can be unavoidable, Employers liability insurance will provide protection for you the employer and compensation where due to an employee.
How much cover for employers liability should you have?
The minimum amount by Law is £5million, however almost every insurance provider provides £10m as standard, this is called a limit of indemnity.
This may be a considerable amount of money, however in many cases it might not actually be sufficient.
There are many reasons but its beyond the scope of this page to get into the why’s etc. Speak to us about your needs and the employees you have we can ensure that you are insuring correctly and including them accordingly for the right amounts.
Dealing with us.
We are specialist commercial insurance brokers, we are not a call center, the people you will be dealing with have had many years experience providing liability insurance for businesses such as yours.
We only use UK based insurers, many you will have heard of, others you may not but, they are all A rated insurers including Lloyd’s of London.
Call Us On: 0330 058 0261
We can usually turnaround quotations for employers liability insurance and public liability insurance within 24 hours and depending on the trade sometimes the same day, call us now let us provide you with Liability Insurance that is not only placed with quality markets its also very competitive.
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