We receive many queries from sole traders and businesses as to whether they need employers liability insurance for their business, the simple answer is that if you employ people in the United Kingdom then you do require this cover. There are, however, some exceptions to this requirement so we shall examine the actual legal requirements a little further for clarification.
The Employers Liability Compulsory Insurance Act 1969
The act requires all employers who employ people in the United Kingdom and in offshore installations in and around the UK to hold a valid employers liability insurance policy. The principal exceptions to this are;
- Businesses where all employees have close family ties with the principal of the business, father son, mother, daughter. This exception does not apply to incorporated bodies and limited companies. if the business is limited, then even if all employees enjoy close family ties then the cover is still required.
- Limited companies where the sole employee of the business is at least a 51% shareholder in the company. This was introduced to remove the requirement from a business where essentially the only employee of the business would not effectively sue himself.
- Certain government departments and organisations are excluded from the requirement.
In spite of these exclusions, and particularly in the case of the family ties exclusion, this does not prevent a small business from taking out and employers liability insurance and this is considered to be sound practice as it offers some protection to the employees in the event of personal injury sustained at work.
The Act requires that the policy has a minimum limit of indemnity of £5M although in practice, policies in the UK are sold with a minimum level of £10M. Higher limits are available upon request from insurers or brokers.
What does employers liability cover me for?
The policy protects the policyholder against claims made against the business by employees in respect of the policyholder’s legal liability for personal injury or disease sustained or suffered during the course of their employment.
How much does employers liability insurance cost?
As with all insurance this will depend very much on the activities of the business and the day to day activities of it’s employees. the variance in premiums can of course be considerable as the risks faced by an employee who is involved in only clerical duties are vastly different to those faced by a deep sea diver. Your previous claims experience and your experience in the trade or business will also be a factor.
How do I buy employers liability insurance?
In the UK employers liability is not generally sold as a standalone product, for most employers it must be purchased alongside;
- a public liability policy
- a business insurance package policy such as shop or office insurance
- a commercial combined insurance or similar product such as combined motor trade or nursing home insurance.
We provide instant access to employers liability insurance quotes and cover with on-line quote service that allows to you to compare employers liability insurance prices from a range of leading insurers. In addition to this our team of specialist brokers are on hand to discuss your requirements with you and to provide you with a personalised quote service directly.
For more information visit our main employers liability insurance page.