Discover the most frequently asked Business Insurance questions
When is employers’ liability not required?
The simple idea is that employers’ liability is required by law for all businesses, since the employers’ liability (Compulsory Insurance) Act was voted in 1969. This is almost accurate - but not completely true. In fact, there are situations where employers’ liability is not required.
Let’s first remind what employers’ liability actually is: employers’ liability covers the policy holding business for any damages and compensations which may be imposed following bodily harm or injuries sustained by an employee while performing his or her duties, or just when he or she was in the company’s premises.
Employers’ liability is not required in a certain number of situations. These situations are restricted to the following:
- For directors of limited companies, owning at least 50% of the shares, in companies which have no other employees;
- If the business is unincorporated, like sole traders and partnerships, and if this business employs only close family members (father, mother, stepfather, stepmother, wife, civil partner, husband, grandfather, grandmother, granddaughter, stepdaughter, son, daughter, grandson, stepson, brother, half-brother or half-sister, sister).
On the opposite, and contrary to what many business executives could believe, it s wrong to assume that employer’s liability is not required if businesses only occasionally hire temporary or seasonal staff.