Employers’ liability cover – a must have, not a might have
Regardless of your business type, having liability insurance is not simply something else you need to think about in human resources terms, that you know you need to get around to addressing, but have not quite managed to do so just yet. If you employ anyone other than yourself and your immediate relatives, policy cover is a legal obligation under the Employers’ Liability (Compulsory Insurance) Act 1969.
Not to have liability cover is an offence in itself that could cost you up to £2500.00 per day for contravening Health & Safety legislation. Failure to be able produce your insurance certificate during Health & Safety Executive spot checks can result in fines of up to £1000.00, even if you have one. That is how seriously the matter is taken.
If workplace accidents happen and any of your current or ex employees make claims against you, such situations are trying and unpleasant enough in their own rights. Imagine the disastrous consequences such claims could have on your business, if forced to face up to the consequences uninsured and on the wrong side of the law.
Put simply, if you are an employer, then employers’ liability cover pretty much does what it says on the tin. It is not a case of your business simply needing policy cover, it is the law that you must have it.
What is covered by employers’ liability?
Its counterpart, public liability insurance, offers cover against damages, illnesses or injuries suffered by members of the public, your contractors, your customers or your suppliers whilst they are doing business with you. Employers’ insurance does much the same thing, but applies to your staff.
Dependent upon the nature and size of your business, regular policies offer £5million or £10million worth of cover, which your Insurer would be liable to settle on your behalf in the case of a successful claim being brought against you.
If your business has multiple locations, for example, more than one factory, garage, office, restaurant or shop, your multiple branches are all included in your policy cover. This is applicable whether your premises operate under the same trading name or are subsidiary companies.
Your policy covers your business for claims made against you for illnesses or incidents suffered by your staff, either on your premises or offsite, as a direct result of their work for you.
The only exception to this rule of thumb is road accidents, for which you will additionally require motor insurance if you have people on the road. Like public liability cover, motor insurance is a partner policy that you will need to take in to consideration as part of your risk management strategy.
What types of claims are made by employees against employers?
The types of claims brought against employers like you can be broad ranging. Whilst some of the very serious claims concerning accidents and even fatalities concern industrial sectors, even a small two person office or corner shop operation is not without its risks. Trips and slips can be caused by disorganised equipment or shoddy fixtures and fittings. What any reasonable person might overlook as a minor annoyance in their home, such as a dodgy plug socket or a temperamental kettle, should be considered as a potential hazard in a workplace.
When you start to think in these terms, any working environment presents a catalogue of disasters waiting to happen. You probably sensibly want to avoid ‘over egging of the pudding’ and hilarity amongst your team about PC gone mad. However, on the obverse side of the coin, we now live and work in a society that promotes claim culture at every turn.
If any of your staff suffer the most minor of mishaps whilst carrying out their daily duties, you can guarantee that someone, somewhere, will be urging them to seek a fast buck on a no win no fee basis. In some cases, such claims are rapidly overturned. In many others, your employees will have clear cut legitimate cases to bring against you.
Is liability cover just another way of getting money out of businesses?
It might feel like there are so many different aspects of running a business specifically designed to make money by scaremongering business owners. Liability polices, on the contrary, can actually save you money, lots of it, in real terms, if and when worst case scenarios present themselves.
Whilst you might have a somewhat tongue in cheek approach to grazed elbows and bruised toes, you have probably also heard or read about thousands of high profile and well documented cases still being contested relating to asbestos poisoning.
Other cases resulting in multiple fines and costs being paid out in recent years include a steel worker who had an arm crushed by machinery that was not adequately guarded. Another involved a cleaner who mistakenly concocted toxic gases by the combination of incompatible cleaning fluids. As a result, the premises had to be evacuated and several staff rushed to hospital with breathing problems. It was concluded that clear information, instructions and training were lacking.
In the vast majority of cases, illnesses, injuries and even deaths to employees were doubtlessly unintentional on the part of the employers. Like you, they, too, probably never thought that anything like that would happen to them. It did – and whilst the damage to their professional reputations cannot be accounted for, their policy covers safeguarded their business in ways that they failed to safeguard their workers.
Of course the essence of employers’ liability cover is the provision of a financial safety net for businesses when unexpected emergencies occur or negligence is proved over time. However, what it also offers, that is not written in to any contracts, is confirmation that you take your business seriously and acknowledge your moral responsibility towards the health and safety of those working hard to make your business succeed.