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Small business – Employers Liability Insurance

There are many small businesses (and a few medium ones too) that don’t realise that they are  legally obliged to take out Employers Liability Insurance to cover them if they employ anyone so that they are protected against claims from their staff, former employees, in case they are injured or get ill because of their work for you. 

It isn’t enough to be insured, if your business does employ people, you must display the insurance certificate where it can be easily read by your staff so that they know what to quote should they need to make a claim against you, it should not just be filed away and forgotten about. A change in the rules means that since 1 October 2008 you have been allowed to display your certificate electronically, however, it is important that any employers choosing this method ensure their employees know how and where the certificate is in case they need it and have reasonable access to it.

There are exceptions , where the companies don’t have to hold Employers Liability Insurance – for instance, the most obvious is the micro-business (or “one man” businesses), but also if you are a  family business where all the staff are closely related then you don’t have to be insured, although it would still be advisable to take out the insurance in this case as even relatives can have accidents and, if you are a limited company, the exemption does not apply  to your business anyway. Other exemptions include public organisations such as a government department, local council, nationalised industry or a health service body.

By having Employers’ liability insurance you know you are able to meet any cost of compensation for your employees’ injuries or illness whether they are caused on or off your site. However, keep in mind that any injuries and illness relating to motor accidents that happen to your employees while they are working for you are more likely to be covered by your motor insurance then your Employers’ liability if they happen in a company vehicle.

Do not confuse employer’s liability with public liability insurance, public liability insurance is different - it covers you for claims made against you by members of the public or other businesses it does not cover you for claims made by your employees. While public liability insurance is generally recommended it is still voluntary, however, employers’ liability insurance is compulsory by UK law and you can be fined if you do not hold a current employers’ liability insurance policy which complies with the law and if it is not displayed.

Before October 2008, you had to keep any out of date certificates to prove that you have been covered for your entire trading period, but since 1 October 2008 there has been no legal requirement for employers to keep copies of out-of-date certificates.
It may be that you are not required to keep them, the author strongly advises to keep a complete record of your employers’ liability insurance as some diseases may appear many years after exposure to their cause (asbestosis for example) and former or current employees may claim against you for the period they were exposed to the reason for their illness.

As with all things business related, it is important to make sure you get the best possible deal for you and your business, so ask around, talk to other businesses about who they use, talk to companies and get multiple quotes, or talk to a qualified broker – if you don’t know where to start to look for an insurance broker, then maybe the British Insurance Brokers Association (BIBA) will be able to help you as they hold  a list of brokers that specialise in Employers’ liability insurance that will let you find the right deal for you and your business.

 

 
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