Unless you’re a one-man operation, employers’ liability insurance is something that nearly every business owner needs. This insurance cover is essential in case compensation becomes payable to an employee if they’re injured or become ill as a result of the work that they do for you. These facts are generally well known, yet a recent survey of small and medium-sized enterprises found that one-quarter believed they only required employers’ liability insurance if they had more than one employee.
In most cases, even if you only employ one person on a casual or part-time basis you are legally required to have employers’ liability insurance. Continuing to trade without it leaves you open to fines of £2,500 for every day that you operate without the correct insurance. The legal requirement is there for a very good reason.
If an employee is injured whilst working for you then they could file an accident compensation claim against you. With the growing popularity of TV-advertised ‘no win, no fee’ legal firms, such actions are increasingly commonplace and are often successful. Without the correct insurance, and depending on the severity of the employee’s injury and your culpability, the damage could potentially run into millions of pounds. This could have a serious impact on your business or even result in bankruptcy in the worst scenarios.
Time in business
The survey also found that firms were more likely to have the correct insurance in place the longer they had been in business. There is potentially a feeling that insurance can wait until the company has grown and is starting to make more money, or is in a position to take on more employees. This is a grave mistake. Where employers’ liability insurance is a legal requirement, it must be in place from day one, and getting the correct insurance should be a priority for all businesses. It should go without saying that an accident can happen at any time, and if you’re not covered this could land you in serious trouble.
Legally your employers’ liability insurance should cover you for at least £5m and must be obtained from an authorised insurer. You also have to ensure your employers’ liability certificate is accessible for employees.
Alan Boswell Group can help review your insurance to make sure you have sufficient cover and are up to date with all of your legal requirements. Speak to one of our advisers on 01603 218000.