Employers Liability Insurance provides protection in the event an employee attempts to claim compensation from your business. If you have employees, Employers Liability insurance is a legal requirement in the UK. If you don’t employ anyone, but have individuals helping you on a regular basis, it may still be advisable to have the cover, as a court of law can rule that your helping hand is in fact an employee.
In the absence of any kind of employment contract, an individual who spends time performing duties at your request can be found to be your responsibility. Your business may be liable for any claim they may make, injury related or otherwise. Are the limits of your employers liability insurance correct according to the demographic of your employees? We’ll take a look at a relatively recent claim made against one of our clients.
Bale twine causes £7,500,000 injury.
Our client – a long established family farming business, engaged the services of a self-employed manual worker over a period of many years.
The worker (aged mid 50s at the time of the accident) also performed work for a Council but our client grew to regard the worker as their own – part of their family almost. So too did the Courts when assessing responsibility for a tragic accident.
The worker was carrying out standard receive and stack duties on a flat bed hay lorry, moving a straw bale when the bale string snapped causing the unexpected motion of him falling from the lorry to the concrete floor of the straw barn.
The Law Courts ruled a Master v Servant relationship existed – an Employer and Employee.
That the worker was self-employed and was free to work for other businesses ( i.e. a Council) was irrelevant in deciding the working relationship between our client and the engagement of the worker.
Our client was the Employer – period!
Macbeth Insurance Brokers had brokered coverage for £10,000,000 under Employers Liability Insurance and the worker (now a paraplegic) is receiving money for his ongoing needs, including major refurbishment of his home and loss of future earnings as will never work again.
A policyholder should not assume they are covered – but must ask, covered for what exactly and for how much.
A judge can reach a decision (as a surprise to you) to be challenged expensively by legal appeal only to a higher Court.
In the case we have shared, had the Court ruled the worker was not an “employee” under a Master v Servant engagement ( a Contract of Services) the position would be the worker (legally) was under a Contract for Services and the injury claim would be dealt with under Public Liability insurance.
Cheap insurance premiums do not come with £10,000,000 protection – but the quirky thing is, the law is making injury payouts bigger and the premium cost to match Court awards is not as big as you might think.
Your known cost is the premium – your unknown cost is what a Judge will award against you in an injury claim.