Employers Liability Cover. Do I need it?
This is an area of insurance cover that is commonly misunderstood.
What is Employers’ Liability Insurance?
Employers Liability Cover is an insurance that covers costs that arise from claims made by any of your employees or former employees for illnesses or injury sustained at your workplace.
Failing to purchase cover
If you fail to have Employers’ Liability Insurance in place when it’s legally required, you can potentially be fined up to £2,500 for each day that you fail to have cover.
You’ll need to make your Employers’ Liability Insurance certificate available to your employees. You can either print it out and display it where your employees can see it, or make it available to them digitally. You also need to make it available to the Health and Safety Executive (HSE), if requested. If you fail to provide your certificate to the HSE, or your employees don’t have easy access to it, you can be fined up to £1,000.
Do I need it?
In nearly all cases the answer will be yes. If you employ people to work at your barbershop, you will need Employers Liability Cover. However, there are other working arrangements where the need for having cover may not be as clear.
Sole Traders and Partnerships
If you have self-employed barbers working at your shop, you may think that they don’t need to be considered under your Employers Liability Cover. However, if you supply their work materials, control where or how they work, profit from their work or generally treat them like an employee you will need Employers Liability Cover. You should also cover temporary staff, work placements, volunteers and casual staff. Although these people may not be employees in the traditional sense you still owe them a duty of care whilst they are working under your control.
If there are two or more working directors involved in the business you will need Employers Liability Cover regardless of whether or not you employ staff.
If you are the sole director of a limited company and own at least a 50% share in the business you do not require cover (unless of course you employ other people as detailed above)
If you’re a sole trader and employ only close family members (such as a husband, wife, son, daughter, father, or mother), you’re not legally required to have Employers’ Liability Insurance. However, this exception doesn’t apply if you run a limited company – you’ll need Employers’ Liability Insurance regardless of your employees’ relation to you.
If you are unsure as to whether you require cover or not, please feel free to call us on 0300 303 4101