Employer's
Liability Protection Cover
Public
Liability Insurance
Do
You Need Employer’s Liability Insurance?
This
is a question that it is very important to get
right. No matter how small your business may
be, if you formally employ others you are required
by law to have Employer’s
Liability (EL) cover – and failure
to do so can result in a stinging fine: £2,500
for each day that you do not have the cover
in place.
Essentially,
EL cover will allow you to meet the costs of
legal fees and damages for employees who either
fall ill or are injured at work through the
fault of the employer. If employer negligence
lies behind an employee’s injury, he or
she can seek compensation even if the firm has
gone into liquidation, so EL insurance is a
real necessity rather than an optional luxury.
Not only this, but the NHS can also seek hospital
treatment and ambulance costs from the firm
in the event of personal injury compensation
being paid.
Be
clear about the definition of ‘employee’,
however – you won’t need this cover
if you are a sole trader and your firm is not
a limited company, or if you only employ close
members of your family. An employee is defined
as anyone who is under a contract with you,
who cannot employ a substitute when not at work,
whose pay you deduct income tax and National
Insurance Contributions from and who you control
in terms of what, where and how they work.
If
these criteria apply, you will need the cover.
The law requires that your EL insurance covers
all your employees in England, Scotland, Wales
and Northern Ireland. You should be insured
for a minimum of £5 million, although
most insurers will provide cover of at least
£10 million.
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