One of the very few legally required types of insurance cover in the UK is Employers Liability Insurance. Because it is so important and is covered by law it is also extremely well regulated to ensure that the insurance companies do not insert extra warranties, restrictions or onerous exclusions.
Employer’s Liability Insurance basically works like this; if you have an employee and they become injured working for you – regardless of whether it is via an agency or an umbrella company or any other arrangement – then as their employer you will be liable for any claim they make against you. If they get themselves a solicitor, then you will most likely be looking at claims over £12000, even in the case of really basic injuries. Typical cases include employees who fall off the first or second rungs of ladders and claim for over £100,000. If the claim is for something more serious, like the loss of fingers or toes to machinery, then you can be looking at claims well in excess of £800,000.
Such claims can succeed even if the employee was at fault in the accident. Despite their own negligence, because such claims are covered by extremely stringent regulations, if there is even an element of fault on the part of the employer, then chances are the claim will proceed. It has been estimated by insurance experts that claims are normally simply reduced by 3 to 5% when the employee has contributed 100% to their own injury!
That’s why if you are trading and you do not have business cover, then you should get some as soon as possible. Although you might think you will never be the subject of a claim, you’d be amazed how often it actually happens. Insurance is your one way of making sure it never ruins your business.