By Judith Rutherford on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs
Employers’ Liability Insurance (ELI) is a legal must if you have employees and it must be at least £5,000. If you don’t have Employers’ Liability Insurance, you’ll be fined £2,500 for every day you’re not properly insured. On top of that you could face a £1,000 fine for failing to display your ELI certificate or refuse to make it available to an inspector when asked.
Do I need Employers’ Liability Insurance?
Employers who have more than one employee must provide liability insurance cover – but with some notable exceptions. As a general rule of thumb, you will need ELI for someone who works for you, if:
- You deduct national insurance and income tax from the money you pay them
- You have the right to control where and when they work and how they do it
- You supply most of the materials and equipment
- You have a right to any profit your staff make and you will be responsible for any losses
- You require that person only to deliver the service and they cannot employ a substitute if they are unable to deliver it
- They are treated in the same way and work under the same conditions as your other staff
How much control you have over the person’s working patterns and location is key here. You will probably not need Employers’ Liability Insurance for someone who works for you, if:
- They do not work exclusively for you, e.g. in the case of an independent self-employed contractor
- They supply most of the materials and equipment they need to do the job
- They are in business for personal benefit
- They can employ a substitute if they are unable to do the job themselves
- You do not deduct national insurance or income tax (but remember they may still be classed as an employee based on other indicators)
Where can I find an Employers’ Liability Insurance provider?
I would suggest taking legal advice if you are in any doubt over whether you require ELI or not. If in the case that you do need to have it, it is very important to use an authorised insurer when you take out ELI, such as those companies working under the terms of the Financial Services and Markets Act 2000. By using an unauthorised insurer you may be breaking the law. The Financial Conduct Authority keeps a register of authorised insurers, which is available on its website www.fca.org.uk/firms/financial-services-register.
Read more
Business insurance: Everything you need to know – Insurance offers vital protection from the crippling costs of a claim against your business. But which insurance do you actually need and which is merely optional?
What insurance do I need for my beautician business? – We help you to scope out what insurance you need as a beautician as well as the need-to-know extras and restrictions
Does a company need insurance for one employee but two directors? – Does a company need any insurance if it has just one employee but two directors? If I do, would that still be the case with just one director who is the employee?
The post Employers’ Liability Insurance explained appeared first on Small Business UK.
via https://www.aiupnow.com
Judith Rutherford, Khareem Sudlow
