Employer’s Liability insurance protects you in the event that one of your employees sustains an illness or injury when working for you and claims compensation. At Rural we saw the number of these claims more than double between 2015 and 2016.
The importance of Employer’s Liability insurance
This isn’t a nice-to-have. If you employ more than one person, having at least £5 million cover is a legal requirement. If you don’t have this insurance then your business could be looking at a fine of up to £2,500 per day.
If you are a sole trader or partnership business and only employ close family members you may be exempt from insurance but if you have any other kind of business or employee then you’ll need to ensure you’re covered. This includes part time or seasonal staff.
If you’re not sure then ask yourself these two questions:
- Am I responsible for setting out when and how someone works?
- Do i deduct their income tax and national isnurance contributions?
Employer’s Liability insurance can cover you for:
- Illness or injury that occur on your business’s premises or as a direct result of an individual working for you.
Things to think about
- Contractors will not be covered under this insurance. However, for a farm business, it is important to make sure you’ve clearly identified whether a worker is an employee or a contractor. Again, this goes back to the question of who set the method of work as well as who provided the tools and how experienced the contractor is. The size of the contractor can sometimes be a consideration. Large contractors should have their own employer’s liability cover.
- To minimise the risk of accidents as well as the need to claim on this cover you should perform regular risk assessments and training for your workers. Evidencing this is really important and doesn’t need to involve piles of paperwork.
- According to a 2016 HSE report*, agriculture is the most dangerous industry to work in, with 27 fatal injuries to workers during this year. While this is a reduction on the previous year it still highlights the importance of having adequate cover.
An example showing the importance of Employer’s Liability
The son of a neighbouring farmer and family friend was working on our customer’s farm, helping with the harvest. He fell/jumped down from a hay bale and badly injured his foot, resulting in an employer’s liability claim for our customer.
* Statistics on fatal injuries in the workplace in Great Britain 2016