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insurance-adviceWe receive a lot of enquiries from clients and potential clients as to the legal situation regarding employers liability insurance, here are some of the most frequently asked questions and our answers, remember that this is general information only for a specific response on your circumstances you need to call us for professional advice.

Do I need employers liability insurance for volunteers?

There is no stated legal requirement in the Employers liability Compulsory Insurance Act 1969 regarding volunteers, however, instead the Act does specify the type of relationship and activities that would cause someone to be regarded as an employee for the purposes of the act and there are clearly circumstances where a volunteer fits these criteria. Clear advice on this subject is hard to come by, so we will give you our opinion – you require the cover. Whether or not the Health and Safety Executive would take proceedings against you for not having the insurance is an issue in their hands but the reading and interpretation of the law is fairly straightforward on this.

If you already have employees and an employers liability policy in force, then volunteers should be covered under that policy. Most insurers will make specific comment as to the inclusion of volunteers.

Do I need employers liability insurance if I have no employees?

If the premise of the question is correct, that you have no employees, then no, but this question is sometimes raised by limited companies where there is only one director. In these circumstances that person is an employee and will require employers liability cover unless they own at least 50% of the shares in the business.

Do I need employers liability insurance for family members?

There is an exemption to the legal requirement for employers liability insurance for close family members working in the business. This exception does not apply if the business is a limited company. The fact that there is not a legal requirement for the insurance does not mean that you cannot arrange the cover for family members, in fact it is most advisable to do so.

Do I need employers liability insurance for contractors and subcontractors?

This entirely depends upon your relationship and contractual arrangements with the contractor. Again there is no specific guidance on contractors or subcontractors in the legislation, only the definition of what types of relationships and activities that would cause a person to be construed as an employee.

If you employ a bona fide subcontractor with their own insurances and their work is undertaken on your instruction but not your guidance, there is probably no requirement to include them in your own employers liability cover. On the other hand a labour only subcontractor working under your instruction and guidance would most certainly meet the test.

Do I need employers liability insurance if I am self employed?

This question is not dissimilar to the earlier question regarding ” I have no employees”. If you are self employed and have no employees, then you do not require cover. If  you work for a limited company you are not self employed.

My employees pay their own national insurance and tax, do I require employers liability insurance?

The individual tax status of a person is not always a decisive factor in this discussion. The law in this regard states provides the tests for when someone is considered an employee and the chances are, in the framing of this question, the answer is yes.
In the interests of clarity we are quoting the advice from the HSE which provides the tests for when employers liability is required.
You may need employers’ liability insurance for someone who works for you where:
  • you deduct national insurance and income tax from the money you pay them;
  • you have the right to control where and when they work and how they do it;
  • you supply their work materials and equipment;
  • you have a right to any profit your workers make although you may choose to share this with them through commission, performance pay or shares in the company;
  • you require that person only to deliver the service and they cannot employ a substitute if they are unable to do the work; or
  • they are treated in the same way as other employees, for example, they do the same work under the same conditions as someone else you employ.

You may not need employers’ liability insurance for people who work for you where:

  • they do not work exclusively for you (for example, if they operate as an independent contractor);
  • they supply most of the equipment and materials they need to do the job;
  • they are clearly in business for their own personal benefit;
  • they can employ a substitute when they are unable to do the work themselves;you do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers’ liability insurance to cover them
volunteers or for:

In some cases you will not need additional employers’ liability insurance for
  • students who work for you unpaid;

  • people who are not employed, but taking part in a youth or adult training programme; or

  • a school student on a work experience programme.