Employers' liability insurance is a legal requirement if you have employees. Even if you don't employ anyone, you may find it's a contractual requirement with some projects. We've also seen a rise in freelancers operating under a Limited company buying employers' liability insurance as an outside IR35 indicator.
Employers’ liability works in much the same way as public liability insurance except it’s explicitly for employees. If an employee of your business suffers an accident or becomes ill during the course of their employment, they may hold you accountable and require compensation. This is why it’s a legal requirement for any small business with employees in the UK.
The insurer we work with defines employees as any person employed by your organisation including contractors that work exclusively for you. It also includes anybody undertaking study or work experience or a youth training scheme.
This means that if you’re outsourcing work to other freelancers who operate independently, they wouldn’t be covered by your employers’ liability insurance. But for any employees or youths undertaking work experience, you’ll be legally required to have this cover.
The penalty for not being adequately insured is £2500 per day. This can be an expensive mistake to not have employers’ liability if you’re legally required to carry it.
You’ll be covered if an employee suffers physical injury, disease or death and you’re legally obligated to pay damages.
Receive up to £250/day depending on employment status where you’re required to attend court as a witness in connection to a claim.
Any sums payable towards settlement are covered. This includes any legal fees incurred during your claim.
There are some similarities between public liability and employers’ liability since both cover bodily injury. These policies protect you in the event someone seeks compensation from you as a result of an accident or injury.
The key difference determining what policy would be triggered is who brings the claim against you. Public liability is for third-parties like clients and members of public while employers’ liability is explicitly for employees of your company.
Example: you’re a photographer shooting a wedding. A wedding guest trips over your off-camera flash and hurts themselves as a result of the fall. They make a claim against you. Your public liability insurance would be the policy to respond.
Example: you’re a marketer and have someone doing work experience. In the office you spill a drink on the floor, resulting in the work experience individual slipping. Your employers’ liability insurance would be the policy to respond.
If you don’t employ anyone or have anybody doing work experience then you are not required by law to be insured. However, other reasons freelancers may buy employers’ liability include:
The Health and Safety executive have published guidance on who is exempt from the law.
If you’re in the process of getting a quote you will notice there’s no option to add employers’ liability. This is because we want to keep our onboarding streamlined for freelancers. However, once you’re onboarded to the dashboard you can add employers’ liability from there. If you’re an OG customer who has not yet been migrated to our new system then get in touch and we can handle this for you.
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