Employers Liability Insurance: does your business need it?

Businesses that employ people must have Employers Liability cover. By law such businesses are required to have insurance for at least £5 million. This applies even if your employees are only seasonal or part-time and includes students who work for you unpaid, people who are not employed, but taking part in a youth or adult training programme and school students on a work experience programme.

Some of the reasons that a person who works in your business can be defined as an employee are as follows:

  • they are under a contract of service
  • you deduct National Insurance and income tax from the salary you pay them
  • you control when, where and how they work
  • they cannot employ a substitute when they are unable to work

The following businesses are not required to have Employers Liability insurance:

  • Family businesses that are not limited companies, where all the employees are close family members
  • Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company

If you would like advice about employers liability insurance for your particular situation, the best thing to do is to contact an independent business insurance broker.

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