Prices for business insurance and business energy are rising at rates not seen for almost two decades, compounding pressure on businesses that are already struggling to deal with the coronavirus crisis.
As a small business, you’ve already got loads on your plate, from managing supplies to ever confusing business energy tariffs, organising your business insurance can seem pretty daunting. From the day one when you start a business, you expose yourself to certain risks. Even before you hire your first employee, your business is at risk. One lawsuit or catastrophic event could be enough to shut you down before your busines even has a chance to get off the ground.
Fortunately, businesses have access to a wide range of insurance types to protect them against these dangers. Here are some insurance types that a business must have in place as soon as possible.
Getting a business insurance is not as complicated as most businesses think. At Business Energy Shop, we have written a number of guides explaining various insurances that small businesses must have in order to operate smoothly. This short guide is regarding Employer’s Liability Insurance that will help you understand what this insurance is and why you should have it in place.
Employer’s liability insurance (EL) protects your business against the cost of compensation claims made by your employee due to injury at work or work-related illness. Employer’s liability insurance is a legal requirement for most businesses in the UK and without this insurance cover, you can get fine of up to £2,500 by Health and Safety Executive (H&S). So, flouting the law could be costly and, in some cases, may close down your business if you are unable to pay those fines.
Does Your Business Need Employer’s Liability Insurance?
If your business employ someone, you must have employer’s liability insurance in place. Even if you hire temporary or volunteer staff on either paid or unpaid basis, under the UK law, you are required to have this insurance. This insurance will cover your staff in case they may get involved in an accident at work or may fall ill due to work.
If your business hires independent contractors who are either self-employed or are employed by another business, you may get exemption of not being responsible to provide them this insurance cover. However, if your business provides these contractors tools and material while working for your business, you become liable for having this insurance cover at place.
However, some businesses which only employ close family members are exempted from this insurance but only if the business is not registered as a limited company with Companies House.
You are also not required to have this insurance cover, if you are the only employee of your business. However, depending on the nature of your business, some of your clients may request you to have this cover in place as a term of your contract.
How Much Does Employer’s Liability Insurance Cost?
Just like other insurance policies (e.g. car insurance), your employer’s liability insurance depends on various factors. But the main factor is the number of people working for your business. Also, if there are higher risks associated with your business, you are more likely to have higher premium on your insurance cover.
Employer’s liabilities insurance cover for a single person business with most insurance companies can start as little as £5 per month.
How Much Your Employer’s Liability Cover Should Protect You For?
As a business, the amount of cover for employer’s liability insurance you must have in place is at least £5 million. If your business work in high risk areas, you may require a higher cover in place.
When getting an employer’s liability insurance, make sure to check if your insurer is authorised by looking at the Financial Conduct Authority register or contact the Financial Conduct Authority.