There are three key types of liability cover which most businesses would consider essential for their protection; Public, Products and Employers’ Liability.
Provides protection in respect of your legal liability to third party members of the public for death, bodily injury, illness or disease and for loss of or damage to property, which arises in connection with your business
Provides the same cover as Public Liability however this specifically relates to any legal liability arising from products supplied by you.
It is a statutory requirement to carry Employers’ Liability Insurance under the Employers’ Liability (Compulsory Insurance) Act 1969. The basis of the cover is that it provides indemnity to the company for compensation claimed by employees for bodily injury or sickness that is alleged to have been caused by the negligence their employer.
Often, a company does not think that they have any employees therefore does not purchase the cover; however, irrespective of the tax status of the worker or how they are paid for their work, it is in fact the nature of the relationship and amount of control over their work that would determine whether the Health & Safety Executive considers you liable for them.
Consequences of not being insured
If you trade without Employers’ Liability insurance, you are liable to a fine from the Health & Safety Executive of up to £2,500 for every day you are found to be without cover.
If a person is injured or becomes sick and they are deemed to have been an employee, the company will be liable to pay their own defence costs and whatever amount of compensation is awarded by the courts to the claimant.
As Chartered Insurance Brokers, Firth & Scott can give you assistance and guidance in making sure you have adequate levels of Liability Insurance. We can also help you establish if contractors working for you legally would be deemed employees or not.