Employer’s Liability Insurance: What is it and Who Does it Cover?

If you run a business and have paid employees, you need Employer’s Liability insurance. It’s the law.

When you take on employees you have a number of obligations, including making sure your employees have a safe environment in which to work. As part of these obligations, you must have insurance in place to protect them.

Here we look at Employer’s Liability insurance in more detail, who it covers and the alternative insurance product available to protect those not covered by Employer’s Liability insurance.

When you take on employees you are legally obliged to take out EL insurance

What is Employer’s Liability Insurance?

Employer’s Liability insurance protects both employers and employees if an employee becomes ill or is injured as a result of the work they do. Employer’s Liability insurance covers the employer’s costs of defending a claim and also pays any compensation awarded to an employee.

Not only is it a mandatory requirement for employers to have Employer’s Liability insurance in place, without it a business could find itself facing a hefty bill in the event of a claim. These costs are likely to be higher than the cost of Employer’s Liability insurance and could be enough to put you out of business altogether.

Businesses which fail to take out Employer’s Liability insurance can be fined up to £2,500 per day for each day they don’t have insurance.

The minimum legal requirement is £5 million but most Employer’s Liability insurance policies offer protection of £10 million.

Who Does Employer’s Liability Insurance Cover?

Employer’s Liability insurance covers your employees. This includes all paid employees, both full and part time. It also includes temporary workers, interns and those on work experience.

Contractors are also covered, provided they are working under “labour-only” terms, using equipment owned by the business and working under the supervision and direction of an employee.

Bona fide sub-contractors who are working independently and using their own equipment are not covered by the company’s Employer’s Liability insurance.

Independent consultants who do not work exclusively for one business would not be covered by your Employer’s Liability policy.

The question of whether volunteer workers are covered or not is a bit of a grey area and largely depends on the wording of the Employer’s Liability insurance policy that you have in place, so it’s worth checking this with your insurer.

What’s the Difference Between Employer’s Liability and Public Liability Insurance?

If you run a business and use independent consultants or contractors who work from your office premises or visit you from time to time, you may be wondering whether you are protected if they are hurt or injured.

Independent consultants, contractors, freelancers and other self-employed workers would not be covered by your Employer’s Liability insurance. They would be classed as members of the public and, as such, could claim against your Public Liability insurance if they were injured while on your business premises.

Unlike Employer’s Liability insurance, you are not legally obliged to have Public Liability insurance in place. Nevertheless, if you regularly have people on your premises who are not employees, you should consider taking out Public Liability insurance. This protects your business in the event that you need to pay a compensation claim if they are hurt or injured while visiting you.

Protect Your Business with Insurance from Tapoly

Tapoly specialise in offering insurance to small businesses. We provide a wide range of business insurance products, including Employer’s Liability and Public Liability insurance, at affordable prices.

If you have any questions or would like to discuss your options please contact our Tapoly team at info@tapoly.com, call our help line on +44(0)2078460108 or try our chat on our website.  

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