Employers’ Liability Insurance: What you need to know
Sinead Campbell, from London Flats Insurance, discusses everything you need to know about Employers’ Liability Insurance.
“Are you sure we don’t employ anyone?”
This is a question probably posed at many Residents’ Management Company (RMC) meetings. Imagine the scene: one of the directors pointing out to his colleague that their insurance cover does not provide protection for injury claims by employees. However, looking to save valuable funds, everyone agrees not to take out this optional cover because they use contractors to complete all the necessary manual work.
Five weeks later an amiable retired resident, paid cash-in-hand to keep the grounds prim and proper, accidentally falls off a faulty ladder and breaks his ankle, meaning that he can no longer drive or pursue his active social life. As anybody would rightfully expect, he puts forward a claim for compensation.
Anyone given cash-in-hand for their labour is likely to be deemed an employee in the eyes of the law, whether cleaner, gardener or handyman. If the provider of labour does not supply their own materials and equipment, work for other businesses or individuals, or submit invoices for work undertaken, that person is likely to be an employee for the period he or she works for you and may look to the RMC for compensation in the event of an injury. In these circumstances, it is highly unlikely that your public liability insurance will indemnify you.
To put it simply, if someone runs a business (even as a sole trader), then that person is not an employee. However, if your tradesman is perhaps a resident with another job, is retired or is just helping out an employer, you will be required to comply with Employment Rights Act and related Health & Safety legislation implications. It can be a very costly mistake to make, so perhaps investing in Employers’ Liability Insurance isn’t such a bad idea after all.
In addition, if you use contractors your RMC will be responsible for the health and safety of contractors on your premises.
The moral of this story is that as soon as you get anyone to work on your premises in whatever capacity, brush up on the Health & Safety at Work Act and The Employers Liability Act to ensure you have sufficient protection in place, and then you can enjoy your property with a clear conscience.
Did you know that if your RMC is a Limited Company it must hold Employers’ Liability insurance by law, even if there is no payroll?
Our London Flats Insurance Buildings Policy includes:
- Automatic cover for voluntary workers.
- Employers’ Liability cover – Limit of Indemnity £10,000,000.
- Public Liability cover – Limit of Indemnity £10,000,000.
- Property Owners’ Liability – Limit of Indemnity £10,000,000.