Employers’ liability insurance is there to protect you if an employee is injured or suffers an illness as a result of their work. For example, one of your employees could injure themselves after tripping over a loose floorboard and break their ankle. As it’s your responsibility to keep your employees safe at work, this could result in a claim against you. Employers’ liability insurance will cover the legal costs occurred whilst defending you, and also any compensation payments if your employee is successful in their case.

Is employers’ liability required by law for tradespeople?

Employers’ liability insurance is a requirement by law for any business owner with employees. This requirement was set out under the Employers’ Liability (Compulsory Insurance) Act 1969, which says that employers need to have a minimum level of insurance to cover any compensation claims.

In other words, if any of your employees suffers from a workplace injury or become ill because of their work you’ll be covered financially to handle the compensation awarded to them. So, whether it’s dealing with a sprained ankle from a loose floorboard or a more serious work-related accident, having employers’ liability insurance means you won’t be left out of pocket, and you’ll be following the law.

Examples of those who are exempt from employers’ insurance include:

• Businesses that employ only their owner (where that employee also owns half or more of the issued share capital of the company)
• Family businesses where all employees are direct family members (excluding family businesses that are incorporated as limited companies)
• Businesses whose only employees are based abroad
• Certain public bodies

Why Do Tradesmen Need Employers’ Liability Insurance?

Employers’ liability insurance isn’t just a safety net; it’s a legal must-have in many places, including the UK. Without it, you could face hefty fines and penalties, not to mention big financial hits if an employee files a claim against you. Tradesmen are especially prone to workplace injuries due to the nature of their work, which can involve heavy machinery, dangerous materials, and physically demanding tasks.

Why is employers’ liability important for tradespeople?

Unless you are exempt from purchasing employers’ liability insurance , the Health and Safety Executive (HSE) can fine up to £2,500 a day for businesses who don’t have the necessary cover in place. You can also get fined if you fail to display your employers’ liability insurance certificate. If one of your employees gets injured or ill on the job and files a claim against you, your legal costs and compensation payments will be covered. No matter how careful you are when it comes to health and safety, there is always a risk of injury when working in the trades industry.