Is Employers Liability Insurance a Legal Requirement?
Employers’ Liability is a legal requirement in the UK. Employers have a legal obligation to take reasonable care of the personal belongings of their employees. When an item is lost or damaged due to negligence, employers can be held liable for the total value. It would help if you got Employers’ Liability when you become an employer. Your policy must cover you for at least £5 million and come from an authorized insurer.
Is Employers Liability Insurance a Legal Requirement? Employers’ Liability covers you for:
- Loss of personal property or its destruction
- Damage to personal property at work or as a result of work activities
- Injury to employees and their relatives
- Damage caused by an employee
- Theft of personal property from your property
- Damage to your property at work or as a result of work activities
- Reasonable legal fees that you have to pay for employment-related claims against you
Why is Employers’ Liability Necessary in the UK?
There are many reasons why you may require Employers’ Liability. Most of the time, your employer will be required to repay money for things such as damaged items, loss of wages and injury claims. Your policy must come from an authorized insurer – meaning it has been approved by the Financial Conduct Authority (FCA) and is one of their authorized insurers.
Are There Any Alternatives to Employers’ Liability?
No. Employers’ Liability is a legal requirement, so all companies in the UK must take it out.
Do I Need Employers’ Liability if my Property is Insured?
Is Employers Liability Insurance a Legal Requirement for properties? It depends. It is highly recommended that you have several insurance policies to protect your business. If you have contents insurance and business property insurance, it could be enough to cover your losses. If you wanted to reduce the cost, you could take out Employers’ Liability.
There are several ways you can reduce your Liability. These include:
- It employs a contract of Liability. This means that you agree to pay compensation at a certain amount on top of what is covered by the policy. This is not recommended because you cannot claim any extra money from the employee if they are found liable in a court of law. Their employer’s liability insurance will not cover them either. It is also unlikely that your policy would cover this excess amount.
- If you are a sole trader, do not have employees or only have a small number of employees working for you, you may be able to get away with not having Employers’ Liability. This is not recommended because your business will become liable for employees as soon as you employ more than one person.
Do I Need Employers’ Liability if my Staff Never Come Into Contact With Customers?
You will still need Employers’ Liability if an accident in the office causes damage to someone’s property, such as a broken kettle or spilling coffee on documents. It could mean that your employer is liable for someone else’s items such as laptops or mobile phones.
You must claim the insurer as soon as possible after the incident. You have a statutory time limit of three months to claim, but you are still required to start the process within a week of the incident. If you fail to complete your claim within this time, you may be unable to claim for the damage.
Claims are not binding until accepted by the insurance company. Once they have all the necessary information, the company will decide from you and your employees.
If you do not have an Employers’ Liability policy and believe you will require it in the future, there is a potential risk that costs could be higher later than they would otherwise be. It is a good idea to think about what equipment you have and what use it is being put to. If employees are using it, it also needs protecting with Employers’ Liability.
Best Practice for Employers Liability Holders
It is essential that the insurance company pays out the claims quickly and gets you compensation for any damage caused. It is also essential to know how long any delay could take. Premature failure can lead to higher premiums in later years.
Is Employers Liability Insurance a Legal Requirement?
Keeping all the information of staff and their contact details on file will make it easier for staff and customers alike when claims are underway. This will reduce the effort involved and help claimants feel more comfortable with claiming as they are given all the information they need to make an informed decision on whether or not they wish to proceed with a claim.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Professionals Insurance
Project Manager Insurance
Property Manager Insurance
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as:
