Employers’ Liability Insurance – What You Need to Know
What is it?
As an employer, you are responsible for the health and safety of your employees while they are at work. If your employees are injured at work or they become ill as a result of their work while in your employment – even if they are a former employee – they may attempt to claim compensation from you if they believe you are responsible.
Employer’s Liability Insurance, made compulsory in 1969, ensures that you have at least a minimum level of insurance cover against such potential claims, and that you will be able to meet the cost of compensation for your employees’ injuries or illness, whether caused on or off-site.
Take care not to confuse Employer’s Liability insurance with Public Liability insurance, which covers you for claims made against you by the public or other businesses, but not claims by employees. While Public Liability insurance is voluntary, Employer’s Liability insurance is compulsory and you can be fined if you do not hold a current policy complying with the law.
Why it is important for your sports business?
As a sports business, it’s vitally important to know you’re suitable insured as heavy compensation pay-outs can have devastating effects. Even if you are a sports club relying solely on volunteers, or you think it’s unlikely that a member of staff would ever look to make a compensation claim against your business, you are obliged by law to take out Employer’s Liability insurance and display a certificate where people can easily read it. Further to this, anyone can face a compensation claim at any point, should any employee suffer serious injury or illness and work and feel that you, their employer, has acted negligently.
If you’re unsure about whether the employees of your sports business would be eligible to make a claim against you, should they have an accident or fall ill, the following information may help give an indication of whether you need employer’s liability insurance:
– If deduct national insurance and income tax from the money you pay an employee.
– If you have the right to control where, when, and how an employee works.
– If you supply the materials and equipment an employee needs to work.
– If you require that particular person only to deliver the service, and they cannot employ a substitute if they are unable to do the work.
What are the risks of not having it?
– A legal claim made against your sports business could result in very large financial losses and possible the sale of the owner’s business, or even a private home.
– Public prosecution results in a heavy fine for those not having the legally required insurance cover – it is an offence that could cost you up to £2500 for any day which you are without suitable insurance. Failure to produce your insurance certification during Health & Safety spot checks can result in fines of up to £1000…it is not a casual matter.
– Some cases can take years to get to court, and with inflation, any claim against you could be much more than your original cover if you choose to opt for only the minimum requirements.
– Damage to your sports business may be enough to prevent the possibility of recovery.
How do I take out a suitable policy?
The first step towards arranging employers’ liability insurance cover is to get a quote from a reputable insurer. You may also be able to arrange combined business insurance that can incorporate all of the different insurances that your sports business will need. Combining various insurances into one policy with a reputable insurer can reduce the total cost of your insurance, compared with taking out separate policies from different insurers. It also simplifies the administrative process of renewing your cover every year!
As you can see, Employer’s Liability insurance is a must-have, not a might get somewhere down the line…
Even if you are great friends with all of your employees, and think that your sports business is located so far off the beaten track it would never be subject to a spot check, the risk really is not worth it. If an accident does happen, and one of your current or ex-employees do surprise you and make a claim, you will have a trying and unpleasant situation on your hands. Imagine how much worse such a situation would become if you were forced to face up to the financial implications of a pay-out, and the huge costs of just being on the wrong side of the law. So ask yourself again…is it worth the risk?
At Protectivity, our Sports Business Insurance comes with employers liability as standard so you have complete peace of mind.