Employer's Liability Insurance

If you employ temporary or permanent staff you’re you may be legally required to have employer's liability insurance. This insurance covers you if you are found to be legally liable for injury or damage to an employee or their property.

This cover is provided with the following policy types:

 

• Professional Liability insurance policy
• Tradesmans Liability policy
• Small Business policy (office, shop, retailer, landlords etc) or Commercial policy (commercial combined, motor trade etc)

Do you need Employers Liability Insurance?

If a business employs people to work for that business then they must have Employers Liability insurance cover. It is a requirement by law under the Employers Liability (Compulsory Insurance) Act 1969. It is an offence to employ someone without taking out Empoyers’ Liability insurance.

The Employers Liability (Compulsory Insurance) Amendment Regulations 2004 gives a couple of exceptions to this requirement.

• Sole-Employee Incorporated Comapnies (SEIC) do not have to purchase EL cover (SEIC - A Company that has only one employee with that employee also owning 51% or more of the issued share capital in that company).
• Also family businesses do not need Employers Liability cover if all employees are closely related to the employer (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies.

Employers Liability for LLP (Limited Liability Partnership)

Whether or not an LLP will need Employers Liability insurance depends upon the status of the persons within the LLP in question. If there are LLP Members and also employed staff, then clearly Employers Liability cover is needed in respect of the employees. The position is less clear when the business is operated solely by LLP Members. In such a scenario, it appears to depend upon what position that person would have had if the business was an ordinary partnership rather than a limited liability partnership. If that person would have been a Partner, then employers liability would not be required. Further, consideration is likely to be given as to whether the individual has signed an LLP Members agreement, whether they were entitled to a discretionary distribution of surplus profit and whether they were entitled to share in the proceeds of a sale of the LLP or in its winding up. Those factors assist in determining whether the individual is more akin to a Partner or employee. These factors are essentially legal arguments and we would recommend that you seek independent legal advice if you are at all unclear as to the status of personnel within your business.

Further information

For a quote or further information please email us or contact us and we will be happy to help.