Employers’ Liability
Insurance

If you employ anyone, you need to consider your statutory obligations and whether you need to arrange Employers’ Liability Insurance.

Whether an employee is part time, full time, zero hours or even a sub-consultant, if they are injured as a result of an accident at work, or become ill as a result of their employment, your employee may seek compensation from you. Employers’ Liability insurance will enable you to meet the cost of compensation for your employees’ injuries or illness whether they are caused at your business premises or at a different location.

The following will give you some indication as to whether or not a person is an employee under the Employers’ Liability (Compulsory Insurance) Act. However, it is for you to satisfy yourself of the status of the persons working for you and if you have any doubts, you should contact us and we will be happy to advise you.

  Where Employers' Liability Insurance is necessary

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

  Where Employers' Liability Insurance may not be necessary

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.