All employers are legally responsible for the health and safety of their employees whilst they are at work. Employees currently employed by you may get injured whilst at work or former employees may claim to have become ill as result of working in your business. The Employers’ Liability (Compulsory Insurance) Act 1969 requires most employers to ensure a certain minimum level of insurance cover against such claims. Barring a few exceptions all employers must take out this type of insurance even if they only hire staff occasionally or use temps or seasonal workers. The exemptions include cases where:
- A limited company business with a single employee who owns at least 50% of the share capital in the company
- A sole trader employing only close family members
This insurance is only available for claims made by your employees or former employees. Very roughly employees are defined to mean those who work according your instructions and from whose earnings you deduct National Insurance, PAYE etc. Claims by public are covered by Public Liability Insurance.
Employers required to take out employers’ liability insurance must be covered for at least £5m and the insurance certificate must be displayed in a place where the employees could view it. As non compliance with this requirement may attract fines up to £2,500 several insurance providers have come out with very affordable schemes for smaller businesses.
