Employers' Liability Insurance
Completely distinct from public liability insurance is another absolutely vital element of any business' insurance policy - employers' liability cover. Compulsory for any company or business operational within the United Kingdom since the instigation of the Employers' Liability (Compulsory Insurance) Act 1969, employers' liability insurance protects the employer from any damages or claims made against them by their employees. Regardless of your relationship with your employees or any agreements you may have regarding their legal rights, the law states that all organizations or companies with more than an owner-employee on staff must be adequately covered, usually for at least £5,000,000 in damages.
Health And Safety
The main reason for having compulsory employers' liability insurance is because employers have a duty towards their employees for their health and safety and general comfort within the work place. If your employee was to fall ill or obtain an injury whilst on the job or as a result of work they have undertaken, they have the right to file a claim against you. Likewise if the employee experiences a serious accident that causes permanent disability or death whilst on the clock, your company could be liable for their expenses and for any claims for pay-outs by their dependants. Further, your company could be liable to pay for the repair or replacement of any of your employees' personal effects if damaged or lost whilst on site. Any legal costs accrued from pursuing the case may also need to be paid for by the employer, particularly if the case is awarded in favour of the claimant.
Documentation
Employers' liability insurance aims to protect the employer and business owner from these eventualities. Whilst British law states that all companies and businesses must have adequate cover, however, there are some exemptions. Government departments and state funded organizations, for instance, do not fall under the legislation. Family businesses whereby every employee is related to the owner are also exempt, as are companies and businesses that are run and administered solely by the owner. On the flip-side, however, are companies who may believe they do not need to take out adequate cover but may in fact be required to - even if your employees class themselves as 'self-employed', for instance, or are not paid directly by your business, you may still need to factor them in to the policy. As a general rule, any person who operates for or within your business for whom you supply the majority of the tools and equipment, for whom you deduct national insurance or tax, and who report directly to you for instruction should be included in the employers' liability cover.
Exemptions
Once purchased, employers’ liability cover should protect the business owner from any expenses brought about as a result of investigations or claims with regards to any employee's health and safety and their right to an equality-driven work-place. The insurance company will issue a cover certificate which should be accessible to all employees - generally insurers recommend displaying the certificate in a place visible to the staff. It is also necessary by law to retain the certificate; any related documents and any renewals for a period of at least forty years, as ex-employees who develop an illness or work-related disability have the right to make a claim several decades after they cease to be employed by the business.
Directors' And Officers' Policy
Another important insurance policy to consider, especially for larger companies or multi-divisional businesses, is the Directors and Officers policy (D&O). This policy does not fall under the employers' liability policy and is therefore a necessary additional expense for companies it applies to. The D&O policy aims to cover any company directors, board members or executives (both past and present) against claims made against them by employees, business associates, competitors, shareholders, customers and clients. Such a policy should provide cover for any claims lodged under the Racial and Sexual Discrimination Act, the Companies Act, the Data Protection Act, the Health & Safety at Work Act, and the Consumer Protection and Wrongful Dismissal legislature. The cover should include legal expenses, damages and any loss of income or business caused by the claim.