The simple answer to this question is yes you do need insurance for temporary workers, whether or not you already have this cover will depend upon your current insurance arrangements and the type of policy you have in force. Whilst the answer is a straightforward one, this is actually a very complex area and I recommend that you seek professional advice as to your own circumstances in this issue.
What insurance do I need for a temporary worker or employee?
You are required by law to hold employers liability insurance if you employ people in the U.K. There are a few exceptions to this and this information may be found on our main employers liability insurance page.
In order that you are protected against claims from third parties for personal injury and property damage you will also need to ensure that the temporary employee is covered under your public liability policy.
Am I covered for temporary employees under my existing insurance arrangements?
This will very much depend upon the type of policy/policies you already have in place. For instance most shop insurance policies will include the employers and public liability cover as standard and you probably will not need to make any adjustments.
If you currently have public and employers liability insurance, whether you are covered for temporary workers or not will depend on the type of policy you have and the insurance company’s wording for that policy. For instance many businesses have what is known as a per-capita rated liability insurance policy, this policy is based upon the number of people working in the business. Logically if you increase the number of workers you should inform the insurer and they will adjust your premium to meet the new risk. However, several of the leading insurers operating in the “per capita” market automatically include cover for temporary workers under their policy, but remember if your policy is arranged without employers liability insurance already, for example just public liability for a sole trader, then the extension will probably not include the employers liability cover automatically.
One of the requirements of the Employers Liability Compulsory Insurance Act 1969 and it’s amendments is that you hold a valid certificate in support of the insurance.
Are labour only sub-contractors classed as employees?
This is a commonly occurring question and opinions do differ on this, but in short our default position is that a labour only sub-contractor should be treated as an employee unless you can demonstrate that they fall outside of the requirements. The distinction between the two is a complex consideration of both the master and servant relationship and the details of any contracts between the various parties. Certainly the requirements for them to be treated as employees are met in the majority of cases we see. One issue that crops up time and time again is the tax treatment of these people and to all intents and purposes this is irrelevant to the insurance considerations.
How can I arrange cover for temporary workers?
As stated earlier, you should seek professional assistance in this matter as the requirements will very much depend on your circumstances. As a specialist liability insurance broker, we have many years experience in dealing with these issues and offer a wide range of products designed to meet the requirements across all industry sectors. You can call us on 0161 300 2930 and we will be happy to review your existing arrangements and assist you in making sure that the cover you require is arranged. We can also point you in the right direction of those insurers that provide the cover automatically and offer you quotes for your liability insurance on that basis.