Employers' Liability Insurance

If your creative business has employees on the payroll, then it is a legal requirement for you to have an Employers' Liability Insurance policy in place.

Employers' Liability Insurance

If your creative business has employees on the payroll, then it is a legal requirement for you to have an Employers' Liability Insurance policy in place.

In the world of creativity, collaboration is key.

Whether you're working with a camera assistant, a makeup artist, or a graphic designer, ensuring their safety and well-being is paramount.

Employers' Liability insurance is not just a legal obligation - it's a commitment to the people who help bring your vision to life.

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What is Employers’ Liability Insurance?

Employers’ Liability insurance is designed to protect your business against claims from employees who have been injured or become ill as a result of their work for you.

This includes covering the costs of compensation and the legal fees associated with defending such claims.

Who Needs Employers’ Liability Insurance?

If you hire other individuals, whether they're freelancers, volunteers or permanent staff, then Employers' Liability insurance is a legal requirement. This insurance is essential for:

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Freelancers and Collaborators

If freelancers are working under your supervision, then you may be legally responsible and have a duty of care towards them.

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Temporary and Permanent Staff

Regardless of the duration of their contract, their safety and well-being are your responsibility.

Who is Considered an Employee?

An employee is any person:

  • Residing in the UK, Northern Ireland, the Channel Islands, the Isle of Man, or the Republic of Ireland and working in connection with your business.
  • Under a contract of service or apprenticeship with you.
  • Hired or borrowed by you.
  • A freelancer or self-employed individual working under your control or supervision.
  • Engaged by labour-only subcontractors.
  • Participating in a work experience or training scheme.
  • Volunteering for you.

Is Employers’ Liability Insurance Mandatory?

Yes, it is a legal requirement to have Employers' Liability insurance if you have employees. This means that you can cover the costs of compensation and legal fees should an employee sue you for injury or illness caused by their work.

There are a few exceptions, such as family businesses, so it's crucial to understand your specific obligations.

What Does Employers’ Liability Insurance Cover?

Employers’ Liability insurance can provide cover for:

  • Compensation if an employee claims for injury or illness caused while working for you.
  • Fees for your legal representation at any coroner’s inquest of fatal accident inquiry and proceedings in any court of summary jurisdiction arising out of any alleged breach of statutory duty.
  • The claimants’ legal costs for which you are legally liable.

Why Choose Mode Insurance?

Your team is the backbone of your creative projects.

At Mode Insurance, we understand the unique challenges of the creative industry. With us, you're not just getting cover - you're partnering with a team that understands the intricacies of your field and the importance of safeguarding every individual you work with.

Employers’ Liability – Legal Limits and Potential Penalties

As detailed in the Employers’ Liability (Compulsory Insurance) Act 1969, you are legally obliged to get an Employers’ Liability insurance policy with at least £5 million of cover as soon as you become an employer.

If you do not have a valid policy in place, you can be fined up to £2,500 for every day you are not properly insured. You can also be fined £1,000 if you fail to display your Employers’ Liability certificate or are unable to produce it to inspectors when they request it.

However, you may not have a legal requirement for Employers’ Liability if all of your employees are closely related to you - such as a husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister.

This exemption does not apply to family businesses which are incorporated as limited companies.

You may also not have a legal requirement for Employers’ Liability if your company only employs you as the owner and that employee also owns 50% or more of the issued share capital in the company.**

Just because you may not have a legal requirement for Employers’ Liability doesn’t mean family or other people can’t bring a claim against you. If a close family member is injured whilst under your care and supervision, they can still bring a claim against you and Employers’ Liability could still provide a level of protection.

What is covered by Employers’ Liability insurance?

What’s included:

  • Our policy provides a £10 million Limit of Indemnity as standard.
  • Fees for your legal representation at any coroner’s inquest of fatal accident inquiry and proceeding in any court of summary jurisdiction arising out of any alleged breach of statutory duty.
  • The claimants’ legal costs for which you are legally liable.
  • Cover against claims made by all members of staff who are working for you in connection with your business, including those who are under a contract of service or apprenticeship, hired or borrowed by you, self-employed and working on a labour-only basis under your control or supervision.
  • Cover against claims by staff on work experience, apprenticeships or volunteering.
  • Up to £250 compensation per day for each director, and partner attending court and £150 per day for employees.

 

What isn’t included:

  • Work in or on, or travel to or from, any offshore installation or support vessel
  • When compulsory insurance or security is required under either the Road Traffic Act 1988, or the Road Traffic (Northern Ireland) Order 1981 or any amending or subsequent legislation
  • Injury to an employee travelling in or on, or getting into or out of, a vehicle where any Road Traffic Act legislation applies
  • Liquidated damages, penalty clauses, fines, aggravated, restitutionary, punitive or exemplary damages or any additional damages resulting from the multiplication of compensatory damages or other non-compensatory damage

It is important to reference our quote document including the policy wording and schedule of insurance for all exclusions and limitations.

Tips on Reducing the Risk of a Claim

As an employer, there are certain things you can do to reduce the risk of making a claim on your Employers’ Liability policy:

  • Understand your legal and contractual obligations with anyone who is under your control or supervision.
  • Establish and document good health and safety procedures to reduce the chance of workplace accidents and illnesses.
  • Keep up to date with any industry-specific regulations.
  • Carry out frequent risk assessments to proactively manage and mitigate potential hazards.
  • Regularly check in with your employees to monitor their well-being and job satisfaction. A safe and happy workforce not only boosts productivity but also contributes to a harmonious workplace culture.
  • Make sure your Employer’s Reference number has been added to your policy.

Employers’ Liability insurance FAQs

Below we have listed the most common questions we get from self-employed creatives about Employers’ Liability insurance. For more information, read our detailed guide: Employers’ Liability Insurance – Everything You Need To Know

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How much does Employers’ Liability Insurance cost?

The cost can vary greatly depending on several factors, including the type of business, the number of employees and the specific nature of their roles.

For creative enterprises, such as photography studios or artisan workshops, the risk might be different than for a construction company, for instance.

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What does Employers’ Liability insurance cover?

Employers’ liability insurance can provide cover for:

  • Compensation if an employee claims for injury or illness caused while working for you.
  • Fees for your legal representation at any coroner’s inquest of fatal accident inquiry and proceedings in any court of summary jurisdiction arising out of any alleged breach of statutory duty.
  • The claimants’ legal costs for which you are legally liable.
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Do I need Employers’ Liability insurance?

If you employ anyone, even on a casual or part-time basis, the law typically requires you to have Employers' Liability insurance. This means that you have at least the minimum cover if an employed person makes a claim against you.

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Who is exempt from Employers' Liability insurance?

You may not have a legal requirement for Employers’ Liability insurance if all of your employees are closely related to you - such as a husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister.

This exemption does not apply to family businesses which are incorporated as limited companies.

You may also not have a legal requirement for Employers’ Liability if your company only employs you as the owner and that employee also owns 50% or more of the issued share capital in the company. (Source: https://www.hse.gov.uk/pubns/hse40.pdf)

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Do you need Employers’ Liability insurance for self-employed staff?

Suppose you hire staff on a self-employed basis or use other freelancers and contractors to help you in your business. In that case, it depends on the nature of the relationship whether you need to have Employers’ Liability in place or not.

If they work exclusively for you, use your equipment and work under your direction, they may be considered employees for the purposes of the insurance, even if they're technically self-employed.

This also relates to if a self-employed person is working under your control or supervision, you may have legal responsibility over their care.

The best place to find this information is on the HSE.gov website https://www.hse.gov.uk/pubns/hse40.pdf

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Do I need Employers' Liability insurance if I have no employees?

No, you are only required to have a valid Employers’ Liability policy in place if your business has employees.

However, if your business uses contractors, self-employed workers or volunteers, you may require a policy depending on their relationship with you and your business and how you treat them.

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Do I need Employers’ Liability insurance as a sole trader?

As a sole trader, if you don’t have any employees or only employ close family members, you typically don't have a legal requirement for Employers' Liability insurance. However, if you decide to hire people, even on a casual basis, or use some versions of a contractor or have volunteers or work experience staff then you may need to have cover in place.

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How much Employers’ Liability insurance do I need?

Employers are required by law to have a minimum of £5 million of Employers’ Liability cover. However, Mode Insurance provides a £10 million limit of indemnity as standard.

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What is the difference between Public Liability and Employers’ Liability insurance?

In general terms, Public Liability insurance covers claims made against you or your business by a third party (e.g. a member of the public, client, customer, supplier or passerby), whereas Employers' Liability insurance covers injury claims made by an employee.

Find out more about Public Liability insurance with our guide: Public Liability Insurance: Everything You Need to Know

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Who is considered a close family member in terms of Employers’ Liability insurance?

For the purposes of Employers' Liability insurance, a 'close family member' typically includes a: husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister.

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How many employees can you insure?

At Mode Insurance our Employer’s Liability Insurance provides cover for up to 3 - Pay As You Earn (PAYE) Employees contracted within your business.

We do not stipulate an upper limit relating to those included in the wider definition of an Employee i.e. volunteers or contractors.

Please reference your policy document for the full definition as well as cover limitations and exclusions.