Why should I get employers’ insurance?

11 Jan 2010

The law

The law - specifically the Employers' Liability (Compulsory Insurance) Act - says that if you employ staff, then you need to get employers' insurance providing cover of at least £5 million. If you fail to comply with the legal requirement, then you could face hefty fines for that failure. Nevertheless, there are important exemptions to the legal requirement. Probably the most common of these is where all the employees are related to each other, such as in a family-run business (the law defines those relationships that qualify employees as close family members). Another common basis for exemption is in the case of a business whose sole employee is the owner or part owner of the business itself. However, there are limits to this exemption so for more information, please refer to the HSE website - http://www.hse.gov.uk/PUBNS/hse40.pdf

The claims

Whatever line of business you are in, you are responsible for the health and safety of those whom you employ. It does not need to be an inherently dangerous workplace or line of business for potentially serious accidents and mishaps to occur. Even in the quietest and most sedate of office environments, for example, it is still possible for an employee to stumble over a misplaced item of furniture, fall, crack their head, and need hospital treatment. Your responsibility as the employer - and, therefore, the person facing claims for potentially very expensive compensation - can be reason enough to get Employers' Liability insurance.

In addition to injuries, staff you employ can also contract illnesses as a result of the work they are doing for you. Indeed, the symptoms of such illnesses and medical conditions can take several years to develop and become apparent. Yet even where the victim has ceased working for you, you could still find yourself and your business liable for the condition and any compensation that might be awarded.

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