Liability Insurance

Liability Insurance from the UK's leading Insurers

Manual tradespeople and professionals working from home or business premises need Public Liabilty insurance. If you have employees, you need Employers' Liability Insurance. If you sell a product you need Product Liability Insurance too.

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Liability Insurance

Do You Need Employers Liability Insurance?

If a business employs people to work for that business then they must have Employers Liability insurance cover.

It is a requirement by law under the ‘Employers Liability (Compulsory Insurance) Act 1969’. It is an offence to employ someone without taking out Employers’ Liability insurance.

  • Sole-Employee Incorporated Companies (SEIC) do not have to purchase EL cover. SEIC’s are a company that has only one employee. That employee owns 51% or more of the issued share capital in that company.
  • Family businesses do not need Employers Liability cover if all employees are closely related to the employer. This is as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister. However, this exemption does not apply to family businesses which are incorporated as limited companies.

Employers Liability for LLP's (Limited Liability Partnerships)

The requirement for Employers Liability Insurance depends upon the status of the persons within the LLP in question. If there are LLP Members and also employed staff, then clearly Employers Liability cover is needed in respect of the employees. 

The position is less clear when the business is operated solely by LLP Members. In such a scenario, it appears to depend upon what position that person would have had if the business was an ordinary partnership, rather than a limited liability partnership. If that person would have been a Partner, then employers liability would not be required.

In addition, consideration is likely to be given as to whether the individual has signed an LLP Members agreement. Or if they were entitled to a discretionary distribution of surplus profit. Or if they were entitled to share in the proceeds of a sale of the LLP or in its winding up. Those factors assist in determining whether the individual is more akin to a Partner or employee. These factors are essentially legal arguments. We would recommend that you seek independent legal advice if you are at all unclear as to the status of personnel within your business.

What is Liability Insurance?

There are 3 main types of Liability Insurance available; Public Liability, Product Liability and Employers Liability. If you are unsure what cover is provided by the various liability policies please see below:

This covers your legal liability for death or bodily injury to the public (third parties). It also covers loss or damage to third party property, not owned by you or in your custody or control. It is crucial cover to anybody who has visitors to their premises or who visit clients premises.

We believe that, whilst this cover is not compulsory, it is essential to any business engaged in manufacturing or supplying goods to a third party.

The policy covers your legal liability in respect of personal injury or damage to property arising from the sale or supply of products specified in the policy.

If you employ temporary or permanent staff you may be legally required to have Employer’s Liability Insurance. This insurance covers you if you are found to be legally liable for injury or damage to an employee or their property.