Exemptions from employers’ liability insurance
In the UK, it is compulsory for most businesses to have employers’ liability insurance that provides cover for injury or disease caused to their workers by their employment.
However, there are some exemptions to employers’ liability insurance, which was introduced by an Act of Parliament in 1969 and is designed to provide health and safety protection to people at work.
Most public organisations – such as government departments and agencies, local authorities and police authorities – are not required to have liability insurance. And nor are National Health Service trusts, health authorities, PCTs or health boards in Scotland.
Other bodies funded through the public purse, including passenger transport executive and magistrates’ courts committees, are also exempt from the law.
More importantly for anyone in business, or looking to establish a business, is that family firms fall under the employers’ liability insurance exemptions. Everyone employed in the family business must be closely related to the owner – husband, wife, civil partner, father, mother, son, daughter, stepchildren, half-siblings etc. However, this exemption does not apply to family businesses that are also incorporated as limited companies.
An exemption from employers’ liability insurance also applies to companies that employ only their owner but in such a situation, the owner must also own a minimum of 50% of any issued share capital in the company.
For companies that are obliged to have employers’ liability insurance, there are some exemptions within the law – for example, if any of your employees are based abroad, perhaps on secondment, you will not be required to have insurance for them.
The law also only applies to those who have a contract of employment with your company, whether verbal, written or implied. For example, you will be exempt from employers’ liability insurance for those who do not work exclusively for you or where you do not deduct tax or national insurance.
It is important to check with the Health and Safety Executive to confirm if your business is required to have this compulsory cover or if your company is one with an exemption from public liability insurance.
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Posted by Denise
on Nov 11 2011. Filed under Insurance News, Liability Insurance.
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