If you need to compensate an employee who has been injured whilst working for you, the sums of money involved could cripple your business. As an employer, you will almost always be held responsible, as you have a duty in law to take reasonable steps to ensure the safety of your staff. That’s why having adequate employer’s liability insurance is a vital necessity.
Claims can be Crippling
Pretty much every week we hear of significant compensation settlements and court rulings where employers have to pay out enormous sums. When one offer of £6,000 after an injury caused by an accident at work was rejected and an action brought, the final figure awarded was £45,500. Another workplace injury was settled at £75,000. Not many businesses can swallow losses like these and then continue to operate at a profit.
In another incident, a cleaner suffered a broken foot while walking through an unlit area that was strewn with building debris. The employer had failed to clear away the debris or provide adequate lighting so that the accident could have been avoided. As well as a large compensation figure, the cleaner received specialist medical help paid for by the employer’s insurers.
It’s not only industrial or manual workplaces where risks lie. One woman was left with poor mobility for life after her ankle was badly broken in a fall down some stairs in the office building where she worked. The compensation awarded was significantly high enough to cover her on-going condition.
Minor Claims Spell Significant Issues for Small Businesses
What are considered minor claims can be viewed as significant for smaller businesses. A hand injury caused by machinery cost one employer £11,000. A claim regarding a hernia suffered while unloading a vehicle was settled at over £5,000. Could your small business cover such losses without insurance?
We’ve talked about these claims to show the importance of having adequate cover in place to deal with these situations. Whilst no-one wants their staff to suffer accidents and injuries, but these things can happen and you need to be prepared for the worst.
Employer’s Liability Insurance: a Legal Requirement
Not only do you need employer’s liability insurance to cover you for these risks, you actually have to have it by law. Not every business owner is aware of this, but it is compulsory. Even if you employ only part time staff or subcontractors, you must have the cover. It is also mandatory if you have students on work experience, or volunteers. It is illegal to operate without this cover.
It is also unwise. Last year a self-employed maintenance worker had help from a friend while working on a disused factory. Unfortunately the friend fell through the roof and three metres to the floor below. The maintenance worker had breached the Working at Height Regulations, and the Health & Safety Executive imposed a fine of £1,250. He was also ordered to pay £1,000 in costs.
There are only two exemptions from the requirement to hold the cover. The first is firms which are not limited companies and employ only close relatives. The second is where a company owner who holds at least a 50% share is the only employee.
Don’t fall foul of the law, and make sure you have adequate cover in place to protect your business from a potentially damaging claim. If you need to arrange employer’s liability insurance, or would like some helpful advice on obtaining the right cover to suit your particular business, please get in touch: we’re here to help.