When starting out as a small business, hiring your first employee is a big milestone. With that comes great responsibility for you as a business owner as well as an employer.
As your team grows, many more challenges come in to play, such as finding like-minded people and building the right culture. But first, you must take care of the basics.
Before your first employee can actually start working for you, you need to set up employers liability insurance.
This is a responsibility every British employer has to take on – as it is a legal requirement to have this policy in place for UK-based businesses. Otherwise, you may be fined as much as £2500 by the Health & Safety Executive for every day that you don’t have it in place.
Besides, this cover is the only one you are requested to publicly display at all times. Your employers liability insurance certificate must be clearly displayed at your premises or online – just so it’s available to inspectors. Otherwise, you can expect another fine of £1,000 to come your way.
Employers liability insurance, also known as EL, protects businesses from claims made by their staff in the event of injury or illness as a result of their work.
If you have one or more employees, you are not only responsible for their health and safety, but also legally obliged to have comprehensive EL cover in place.
Whether you have full-time staff or work exclusively with contractors, casual, temporary or part-time staff, you are responsible for their health and safety at work.
No matter what your company does, accidents at work do happen, and your employees might claim your business is to blame.
What does EL cover?
If an employee is injured or becomes sick as a result of working for you, you may be held liable and might have to pay compensation as a result.
In this case, employers liability insurance is there to cover all costs that come with this kind of claim, including defence and compensation charges.
Something as silly as slipping on a wet floor in your co-working space kitchen may have serious consequences.
If your employee gets hurt and makes a claim against you, the compensation fees can be quite hefty. And while most insurers won’t cover shared workspaces, Digital Risks has designed bespoke cover to fit co-working spaces specifically.
What if a plug in your office malfunctions and electrocutes one of your staff members?
You too could face a nasty shock if your business faces a legal claim for injury or long-term health damage. If that happens, your employers liability insurance would pick up the bill.
In the unfortunate event that your building becomes a victim of damp or mould, unsightly walls won’t be the only thing to worry about.
These issues are often accompanied by contaminated air that could have serious implications for your team’s health, especially those with existing respiratory conditions.
And even if there are no asthma sufferers on your team, damp and mould could seriously affect their immune systems for an extended period – and no amount of paracetamol is going to solve the problem.
The requirement to get this cover doesn’t apply to you if you are a sole trader, a partnership or if your employees are family members or if your team works abroad – although, with the latter, the country where they are based may have similar laws that you need to comply with.
In these cases, you are not legally required to get this cover, but it’s always a good idea to double-check with the Health & Safety Executive here.
Getting the right level of cover
Unlike other business policies that offer a range of covers, the limit for employers liability stands at a fixed amount of £10 million. The factor that will impact your premium (a.k.a. the price you pay for this insurance) is the number of employees you have.
With Digital Risks, a standard employers liability cover will cost you from as little as £5.35 a month. It is one of the essential covers for any business regardless of size or industry and is often bought alongside public and products liability.
This policy covers you and your team for claims made by members of the public relating to damage or injury caused by your business activities or products, so it is a good idea to make sure both of these essentials are ticked off.
Digital Risks operate on a monthly subscription model so it is super easy to update your cover as your business changes and your team evolves.
Other types of business insurance
ByteStart has a series of practical guides to help businesses get to grips with the various types of business insurance, including;
- Which Types of Insurance Must Your Business Have?
- ByteStart’s Guide to Professional Indemnity Insurance – What You Need to Know Before Buying Cover
- What is Public Liability Insurance? – A Guide for Businesses
- A Guide to Intellectual Property Insurance for Start-Ups and Small Businesses