Looking after your employees is, of course, good for your business; your personnel do, after all, form the company’s backbone. However, looking after them also means making suitable amends should something go wrong – and, if those amends will have to be financial, employer’s liability insurance can help you pay the cost. So, what exactly can be claimed when this insurance is in place?
Why might you need employer’s liability insurance?
Your company might already carry out a wide range of procedures with the aim of protecting workers from harm. However, accidents can still happen – and, when one does, your company may be directly at fault. For example, a worker could fall and get hurt due to faulty scaffolding that your firm provided. Alternatively, an employee could become ill as a result of handling materials that the company had let them use, but hadn’t realised could have this adverse effect.
Moreover, employer’s liability insurance is legally necessary for all companies except some meeting very particular criteria. Those exempt firms include family businesses employing strictly particular family members, plus employee-free companies – like sole traders and freelancers.
How much cover would you have at your disposal?
This would largely depend on what type of business you are running. The Federation of Small Businesses cites the Employers’ Liability Act, which specifies the legal necessity of at least £5 million cover for each company’s employer’s liability insurance.
However, your own business might need significantly more than this. Your company might have very particular risks and liabilities necessitating cover of up to £10 million. The heightened risks could arise from – for example – heavy machinery and chemicals that your employees routinely use. In office jobs, meanwhile, the risks could be much lower.
Which employees would be covered by the insurance?
The straight and simple answer is: all of them! The longer and more complex answer is: all employees for whose work the company decides hours and locations. Both paid and unpaid employees are included here; don’t underestimate the reach of a typical policy…
That policy for employer’s liability insurance will also cover – for example – temporary staff, contractors, freelancers, students and volunteers. Therefore, if any of these are employed by the company and it is directly responsible for an illness or injury they pick up, you would be able to fund compensation by making a claim on the insurance… provided that the policy is a typical one.
Would only accidents that happen on your business premises be covered?
The short answer is no. Yes, illnesses or injuries that occur on the corporate premises – which could be as small as an office, as large as a factory or something else entirely – could prompt the need for compensation that employer’s liability insurance can fund.
However, the insurance is intended to cover problems directly resulting from employees’ working practices. It is the practices your company has determined, rather than the physical place where those practices are carried out, which has the ultimate weight.
This means that accidents happening either on or off site would be covered, as Bytestart clarifies. While an employers’ liability insurance policy might not account for incidents that happen while driving, these would typically be covered by a separate motor insurance policy held by the business.
Would employer’s liability insurance also cover members of the public?
No. People who visit your premises could also face risks at your workplace – and, if your company’s business activity leads one of these people to suffer an illness or injury, they would be entitled to sue your business like one of your employees could if they suffered the same issue.
However, to pay for compensation for a blighted visitor, you would have to instead claim on public liability insurance. This is a completely separate form of insurance and not one which businesses legally need to hold. However, in the case of most UK companies, it is – by law – essential to have employer’s liability insurance.
Fortunately, for these companies, sourcing a cost-effective policy for that insurance is easier with assistance from an insurance broker. Be Wiser Business Insurance is a good example of such a broker that specialises in offering corporate insurance policies.