What is employer’s liability insurance?
‘What is employer’s liability insurance?’ is a very important question for a small business to ask. Indeed, finding the most suitable employer’s liability insurance quote is very important for a business, whatever their industry or line of work. All businesses will incur a certain level of risk in their day-to-day dealings that could potentially affect members of staff, and as such, employer’s liability compulsory insurance is obligatory by law for all companies who hire employees.
Injury, illness or loss to members of staff can result from the most simple of actions in the workplace – an employee could trip on a wet floor or over a cable on the work premises, resulting in them having the right to make a claim.
Of course, the majority of businesses will do their absolute utmost to protect their employees from risk, but it is impossible to eradicate these risks completely; as such, any business that does not invest in employer’s liability compulsory insurance is not only likely be liable for very expensive fines, but is also breaking the law.
Paying the relatively small cost of employer’s liability insurance, in comparison to large legal fees that could be incurred, is certainly the most sensible option for a responsible business. Specifically, a business could be liable for £2500 for each day they have traded without cover, or up to 14 years imprisonment.
Statistics show that there are approximately five million small businesses and SMEs in the UK and additionally, that these small businesses employ sixty percent of the working population. Unfortunately, statistics also show many of these businesses are operating illegally, without employer’s liability compulsory insurance. This could be a result of lack of knowledge, or in some cases, irresponsibility; whatever the reason, the true importance of paying out the cost of employer’s liability insurance is not to be misunderstood.
What are the main reasons to have employer’s liability insurance?
The primary reason for investing in employer’s liability insurance is that the compensation costs of defending a business against an employee claim will invariably be very large and potentially extremely damaging to a business. Whatever capacity a person is working in, they are able to trigger a claim; even voluntary or unpaid helpers, or staff who are self employed but operating from a business premises could make a claim.
Indeed, the recent prevalence of ‘no win, no fee’ services make it even easier for employees to seek legal advice and put this advice into practise, if they believe they have been adversely affected by an incident at work. Most employer’s liability insurance deals will cover a business for five million pounds; investing in this cover is undoubtedly preferable to incurring large fines for remaining uncovered.
There are some exemptions to the law, which are worth consideration. Sole traders who do not employ staff will not need employer’s liability insurance; neither will family businesses or the majority of public organisations, including local or police authorities, government departments and health services bodies.
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