Why Your Small Business Needs Employers Liability Insurance

Accidents happen in the workplace.  An employee can trip over stray wires in an office, they can slip on a wet floor in a retail shop, all resulting in a possible employers liability claim. Luckily, businesses are legally obligated to invest in Employers Liability Insurance, meaning you’re protected, while covering the needs of your employees too!

Some work places or industries are shown to have a high rate of injury or illness in comparison to other industries, but then Employers Liability insurance premiums will usually reflect the high risk and low risk industries respectively.

We’ve pulled together a couple of examples of employer liability claims that have been made against small businesses.  While in Claim 1, the employer has Employers Liability Insurance, the business within Claim 2 does not, and is fined accordingly.

Remember Employers Liability Insurance is compulsory if you have any number of employees, regardless of whether they are paid, unpaid, volunteers or subcontractors.

Employers Liability Insurance Claim 1

An employee within an office has made a hot drink and it returning to her desk, which is on the other side of the office from the kitchen area.  Whilst they are walking, back to their desk the employee trips on a piece of carpet that is raised off the floor.  The trip caused the employee to fall and break her arm and to suffer mild burns because of dropping the hot drink when falling.

The employees injures were treated in hospital and they were signed off from work for several weeks.  During the time off from work, they had to travel to and from hospital for check-ups to her injuries.  Whilst the employee was, absent from work they decided to make a claim against their employer, as the carpet they had tripped over was dangerous and should have been fixed.

The employer tried to defend the allegations made in the claim by saying that the carpet had only become loose that day.

The claim made it to a court of law and the courts decided that the employees claim was a valid claim, and ordered the employer to pay compensation of £20,000 to the employee for injury, costs and other damages.  The court also ordered that the employer was to pay all of the legal fees, including those of the employee.

The total amount the employer had to pay out was over £100,000 but because the employer had compulsory Employers Liability insurance, all the costs were then met by the liability policy.

Employers Liability Insurance Claim – Example 2

Four employees are employed by a small electrical firm, with two of the employees carrying out essential electrical maintenance work.  One of the employees is a new apprentice and forgets to earth the electrical circuit they are working on.  The apprentice then sustains an electric shock that causes minor burns and results in the apprentice having time off from work.

Whilst the apprentice is absent from work they decide to make a liability claim against his employer.  His employer disagrees with his claim saying it was the apprentices fault for not completing the necessary safety precautions.  The claim made it to court and courts decided that the apprentice had not received adequate health and safety training from his employer.

The employer was ordered to pay compensation of £17,500 to the apprentice for his injuries and loss of earnings.  The court also ordered that the employer to pay all of the legal fees, including those of the employee.

Unfortunately, the employer was not covered for Employers Liability insurance as they had thought that it was not necessary having only a small number of employees.  All of the costs that had been awarded to the apprentice still had to be paid to the apprentice, so had to come from the employers own pocket.  Several weeks later the Health and Safety Executive also caught up with the employer after investigation they discovered that the employer had not had Employers Liability insurance for at least 300 days.  The employer was then fined £2,500 for each day that he did not have Employers Liability insurance.

Again this had to be paid from the employers own pocket which resulted in the business ceasing to trade due to the costs that had been incurred.  All of this could have been avoided had they taken out an Employers Liability insurance policy.


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