Repercussions of Not Having Employer’s Liability Insurance

Because it is compulsory for employers within the United Kingdom to carry a minimum of five million pounds of employer’s liability insurance, the Health and Safety Executive, enforces steep levies for violators of the law. Currently, the penalties for lacking the required policy, accrue at a daily rate of up to £2,500, until the company has remedied the issue.

Additionally, laws require that your evidentiary certificate of the policy must be able to be viewed by all employees of the company. Typically, this is displayed in a common employee area, such as a break room, or common entryway within the building. However, it has become increasingly popular for businesses to display their certificate of insurance electronically. For this method to be acceptable, access to, or utilization of a computer would typically need to be a daily part of labourers’ job functions. Violating this legality, can result in fines up to £1,000 daily, until the certificate is properly displayed in accordance with the regulation.

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Obviously, the most serious repercussion of not carrying Employer’s Liability Insurance occurs when an employee suffers injuries and requires medical treatment. In this situation, the employee will be suing the company directly for compensation relating to their claim. Typically, insurance policies will cover these amounts up to the subscribed limits when purchased. If no such policy exists, full financial responsibility falls upon the company, which could be the demise of the enterprise. Consequently, if an employee sues the company for liability, any responsible parties could additionally be ordered to pay exorbitant fines, and possibly be sentenced to jail time. Possibilities such as these render obtaining a policy as beneficial, regardless of the premiums.

One of the most common misconceptions applicable to Employer’s Liability Insurance, is whether a particular enterprise is compelled by law to carry a policy. Family owned and operated enterprises are one such affected group that is not required to have coverage if only immediate relatives are employed at the business. In retrospect, protecting the welfare of one’s family is typically of high importance, therefore, obtaining a policy in order to do so, may be beneficial for family owned companies. It is detrimental to consider that any sort of familial dispute could serve as a catalyst to cause even close relatives to find themselves seeking remediation in the court of law.

Because of the complexities involved in understanding the law itself, it is highly advised that owners seeking to advise themselves in these matters undertake stringent and thorough research of the legalities. Those left with any uncertainties, are best advised to seek professional guidance or counsel for assistance. Bear in mind that the only fail-safe way to ensure the best interest of all parties are served, is to purchase and maintain adequate employee insurance.