An employer’s legal responsibility
When you act in the capacity of an employer you have a duty of care to provide a safe working environment for your employee. You need to ensure the duties they perform are reasonable and that they have the necessary tools or equipment to perform their job role. It is your responsibility to provide these.
Once you are registered as an employer with HMRC you are required by law to insure against liability for injury or disease (Employer’s Liability Insurance). The fact that you are a domestic employer does not change this.
The technical definition of Employer’s Liability Insurance is to ‘indemnify the Insured in respect of their legal liability for claims by their employees for death or bodily injury, including disease, suffered in the course of their employment’. An example could be as simple as the employer leaving something on the stairs. The employee could slip and fall resulting in an injury and the employer may be held accountable if they are found to have failed in providing a safe place to work and, depending on the injury, the damages and legal costs involved could be substantial – not only for the injury itself but also potential future loss of earnings.
Don’t be caught without it
You can have more than one policy for Employers’ Liability Insurance. However, the total value of the cover provided by the policies must be at least £5 million. You should also bear in mind that the £5 million minimum level of cover includes costs, so you may wish to purchase cover of more than this.
Failure to take out Employer’s Liability Insurance leaves you in a vulnerable position, not only from a regulatory perspective, but also with regards to your personal wealth. You can be fined up to £2,500 for each and every day that you are without suitable insurance.
Check your home insurance policy
Many domestic employers are unaware that they may already be covered for Employer’s Liability, as it is often included within their home insurance. We strongly advise that you check with your home insurance provider and if you experience difficulties finding out, ask to speak to a more senior member of their team – call centre advisors may also be unaware that they provide this cover!
If you still run into problems, by all means give us a call here at Enable Payroll and we will do our best to help.