With the evolving diversity in services provided by care companies and charities, there is an increasing need for insurers to offer specialised cover to these sectors. Whilst there have been recent additions to areas of exposure requiring cover, such as cyber-attacks and data breach, Employers Liability remains a vital area of cover for any business.
What is Employers Liability Insurance?
Employers Liability insurance covers a company for any claim brought by employees or volunteers, past or present, for a wide range of physical and psychological injuries. It covers legal costs and expenses in defense of a claim, and for damages and compensation awarded against you.
Do I need to have Employers Liability insurance if I have a care company or charity?
If you employ paid staff, or if you control the manner in which they work, for example as a volunteer or as a labour only subcontractor, you are legally obliged to have Employers Liability insurance. This will protect your charity against claims for any injury where you are deemed to be negligent on behalf of the people working for you.
To keep on the right side of the law you must:
- Have cover to the value of at least £5 million
- Purchase your Employers Liability insurance from an authorised insurance broker or insurer
- Display your certificate of insurance on your charity’s premises either physically or electronically. If electronically, it must be easily accessible by all members of staff
If you don’t comply:
- You can be charged £2,500 for every day that you do not have it
- You can be charged £1,000 for not displaying your certificate appropriately, or not presenting it to Health and Safety executives when requested to do so
What is the definition of an “employee”?
An employee is someone who:
- You pay a wage, from which national insurance and income tax is deducted
- Has the location and time of their work chosen for them by you
- Uses your work equipment
- Has no right to the profit gained from the work they do for you (exceptions being agreed commission/bonuses/shares)
- Cannot subcontract their role under your employment
- Does the same work, under the same conditions as someone who is defined as an employee
How does Employers Liability Insurance protect me?
Sadly, we are living in an increasingly litigious age where injury claims are becoming commonplace. We’ve all received those dreaded calls encouraging us to make claims for compensation which a generation ago would have been unheard of. Consequently, Employers Liability claims are now a regular occurrence.
Without your Employers Liability insurance, as an organisation, you would have to fund the full cost of all claims. As a charity you have a duty of care to protect your organisation’s assets and resources which is why you are legally bound to have the appropriate insurance cover in place.
Examples of real claims
- A volunteer brought a claim against a charity alleging unsafe working practices due to receiving an electric shock whilst untangling Christmas lights
- An employee was injured due to slipping on the drive at the front of the insured’s property. Lawyers alleged that the driveway was covered in moss and therefore very slippy
Such incidents can happen very easily but have to be defended if a claim arises. To put the cost into perspective, even a minor injury can cost several thousand pounds to defend. A more serious injury or illness can lead to tens – or even hundreds – of thousands of pounds.
Allied Insurance Services, has a long history of dealing with care companies and charities. Call us on 01942 403381 for a quotation for Employers Liability insurance with no obligation.