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Facts Regarding Employer's Liability Insurance

If you employ one or more persons it is a legal requirement to hold employer's liability insurance. A person is classified as an employee if they are: paid employees, labor-only sub-contractor's, hired persons and persons provided by government Sponsored schemes. A partnership can elect to exclude or include employer's liability insurance for injuries incurred to working partners.

The employer's liability insurance policy covers you for claims made against you if an employee is killed, contracts an illness or disease or injured while working for you in connection with your business. It also covers you for claimant's costs and expenses plus cost of your legal representation at a Coroner's Enquiry and in any court proceedings made against you by an employee. You will also be covered for costs and expenses incurred in defense of a prosecution relating to the welfare of employee's under the Health and Safety at Work Act 1974.

Examples of some types of possible claims that could occur are in if an employee is working with machinery and he severs a limb, hand, finger etc., or an employee may be working height wise, say by painting a homes trim and accidentally slips and falls off the ladder. Another scenario is an employee that inhales fumes over a certain period of time and it leads to illness and possible death.

As an employer you are responsible for the safety and health of your employee's while they are at work.

All employer's must have employer's liability insurance except most public organizations including government departments and agencies, local authorities, police authorities and nationalized industries, health service bodies in national health service trusts, health authorities and primary care trusts.

A family-run business is also exempt. You will not need employer's liability insurance if you and your employee's are closely related, as in Mother, Father, Son, Daughter, Grandfather, Grandmother, Grand daughter, Grandson, Brother, Sister, Half-Sister, Half-Brother, Stepchildren, Husband , Wife and so on. This exemption does not apply to family businesses' which are incorporated as limited companies.

Your certificate of insurance must contain the level of coverage, company covered and the name of the insurer.

An employee may not be covered by employer's liability insurance if the employee works for more than one person and operates as an independent contractor. However, if an employee has more than one job they could still be considered an employee. Even if the person is self-employed for tax purposes, they may be classed as an employee and you as the employer may still need liability insurance coverage to cover you.

Other people who may not be covered under the employer's liability insurance policy are student's working unpaid, people not employed but are taking youth or adult training programs or a school student on work experience programs.

A difficult area is that of domestic help. If they work for more than one person they will probably not be covered under the liability insurance policy.

You are required as an employer to keep records in connection to the number of employee's you have, the tasks/duties of each individual employee performed and their gross earnings. You will need to submit a statement like this at the end of every policy period.

To keep your employee's healthy and safe and to keep your business running smoothly employer's liability insurance is the way to go, not to mention is a requirement of the law.