All employers are responsible for the health and safety of their employees whilst they are at work. So, in the event of any injury, illness or disease that is sustained during employment, an employer could be liable. However, when they take out Employers’ Liability Insurance, any resulting claim is made against the insurance policy rather than against the employer themselves.
Does my business need Employers Liability Insurance cover?
Almost any business, regardless of size or sector, needs Employers Liability Insurance if they have more than one employee working for them. The only exemptions are public organisations, family businesses (where the employees are closely related and the business is not a limited company) and companies where the only employee is the owner (who must own at least 50% of the business).
An employee is defined as someone who works for your business, is under contract and whom you deduct income tax and national insurance payments for. If your employee works from home, is casual, seasonal, temporary or even a volunteer – you must still have Employers Liability Insurance according to the Employers’ Liability (Compulsory Insurance) Act 1969.
Falling foul of the Employers Liability (Compulsory Insurance) Act 1969 could land you with large penalties. In fact you could be charged up to £2,500 for every day that you are without cover and you can also be fined if you cannot show a valid certificate to a Health and Safety executive.