Employers’ Liability Insurance explained – Small Business UK

Employers’ Legal responsibility Insurance coverage (ELI) is a authorized should if in case you have workers and it have to be not less than £5,000. If you happen to don’t have Employers’ Legal responsibility Insurance coverage, you’ll be fined £2,500 for day by day you’re not correctly insured. On prime of that you possibly can face a £1,000 nice for failing to show your ELI certificates or refuse to make it accessible to an inspector when requested.

Do I want Employers’ Legal responsibility Insurance coverage?

Employers who’ve a couple of worker should present legal responsibility insurance coverage cowl – however with some notable exceptions. As a basic rule of thumb, you will want ELI for somebody who works for you, if:

• You deduct nationwide insurance coverage and revenue tax from the cash you pay them
• You’ve the suitable to manage the place and after they work and the way they do it
• You provide a lot of the supplies and gear
• You’ve a proper to any revenue your employees make and you’ll be answerable for any losses
• You require that particular person solely to ship the service they usually can not make use of a substitute if they’re unable to ship it
• They’re handled in the identical means and work beneath the identical situations as your different employees

How a lot management you will have over the particular person’s working patterns and site is essential right here. You’ll in all probability not want Employers’ Legal responsibility Insurance coverage for somebody who works for you, if:

• They don’t work solely for you, e.g. within the case of an impartial self-employed contractor
• They provide a lot of the supplies and gear they should do the job
• They’re in enterprise for private profit
• They will make use of a substitute if they’re unable to do the job themselves
• You don’t deduct nationwide insurance coverage or revenue tax (however bear in mind they might nonetheless be classed as an worker based mostly on different indicators)

The place can I discover an Employers’ Legal responsibility Insurance coverage supplier?

I might counsel taking authorized recommendation if you’re in any doubt over whether or not you require ELI or not. If within the case that you simply do must have it, it is vitally necessary to make use of an authorised insurer once you take out ELI, resembling these corporations working beneath the phrases of the Monetary Providers and Markets Act 2000. Through the use of an unauthorised insurer you might be breaking the regulation. The Monetary Conduct Authority retains a register of authorised insurers, which is on the market on its web site www.fca.org.uk/corporations/financial-services-register.

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