If you have any full-time, part-time or seasonal employees working for your company, you are required to have Employers Liability Insurance (ELI). For some businesses the definition of an ‘employee’ can be a grey area; as a general rule, if a person works for your business only (is not employed by any other business), and their wages are taxable, then you need to purchase ELI.
If you have ELI, you will not have to pay compensation for employee illness or injury that results from your workplace, as long as you agree to meet the requirements of your policy (such as conducting a thorough health and safety audit), and the compensation required does not exceed the value of your cover.
For this insurance to be legal the value must require the standard value according to the goverment’s rule, excluding any other fees charged by the insurance company. the amount you need is likely to vary depending on the size of your business and how risky you perceive your business’ activities to be.
Since this type of insurance is compulsory for businesses, it does not always come cheap. Prices are generally lower for low-risk businesses such as offices, and any business with a no-claims discount, than for high-risk businesses such as asbestos removal companies. The price of ELI insurance will vary for each business which takes out an insurance policy.
The price you are charged will usually reflect the claims history of other firms which operate in a similar way to your own. Many of the packages available cover the legal costs involved for both parties should an employee make a claim against you, but this is something that is worth questioning when purchasing the insurance.
If your business is found to be operating without ELI the financial penalties can be extremely high.
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