Employers should have insurance cover which will pay out if employees become ill, are injured or killed when at work and the employer is found to be at fault. Employer's liability insurance is largely compulsory in most industrial nations along with third party insurance for motor vehicles.
What are the Benefits of Employers' Liability Insurance?
Employers' liability insurance will pay employees or their families in the event of injury or death when at work. Without this type of insurance policy in place employers could face hefty claims from workers. Accidents at work are surprisingly frequent and can never be completely avoidable.
How to Find & Arrange Employers' Insurance
Employers' insurance is usually arranged at the same time as the public liability insurance for the business. A person running a small enterprise may request business insurance and not even realise that it could incorporate typically two, three or even four different types of insurance:
- Employers' Insurance, sometimes called employee insurance;
- Public Liability Insurance, covers clients as well as the general public;
- Buildings insurance or insurance for property, tools, plant
- Motor vehicle insurance for vans, cars, etc.
How Much Will Employers' Insurance Cost?
The cost of any insurance is determined by the insurance companies and is related to the perceived risk and the experience of claims, the cost will be based on the number of employees. In the UK the insurance held must be for a minimum of £5 million but £10 is common.
In the construction industry, for example, insurance for people who work on roof tops or scaffolding is higher than for carpet fitters or painters. The risks facing office based workers who do not visit members of the public are quite low.
A record of the employers' liability insurance must be retained for 40 years in the UK.
Employers' Liability Insurance for Temporary Workers
All staff must be covered and an exact number will be written in the insurance documents, but insurance companies offer very different types of policies. If the number of employees changes frequently through the year it is worth contacting a number of different companies and discussing the situation with them. Some employer's insurance policies require an exact number for permanent employees but will also include insurance cover for a larger number of temporary workers.
Employers' Liability Insurance for Temporary Workers
If the business has contracts with sub-contractors then the insurance liability must be clarified. Generally, if the subcontractor is a genuinely self-employed and required to hold public liability insurance for the work that they do then they will not need to be covered by the main contractor's insurance. The employer, or contractor, may need to hold a copy of the subcontractor's insurance documents.
Things to Know About Employee Insurance
Insurance to cover employees is called Employer's Public Liability Insurance in the UK and Workers Compensation insurance in Canada. It is mandatory and in the UK records must be retained for 40 years.
Any employer will need to take out insurance to cover employees, even temporary and part-time employees. Self-employed sub-contractors do not have to be covered by the policy.
Sources:The UK Department for Work & Pensions
Deborah Percy - BSc. MA. Managing Director of a heating & plumbing business. Interest in maths, science & research. Mother of 3, including twins.
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