One of the most popular questions posed by our clients is about who are deemed to be an employee from an insurance point of view and are they covered by their insurance policy
Questions such as…
“I’ve got someone on work experience, are we covered to have them?”
“I’m not employing anyone on our construction site, just using labour only subbies, that’s alright isn’t it?”
“We’re not paying them so does that mean we’re not responsible?”
“The company next door are letting us have one of their guys to operate our fork lift as we’re short staffed today, whose policy will cover them if they get injured?”
Legal Requirement…
All Employers’ are required by law to have Employers’ Liability insurance (as per the Employers’ Liability (Compulsory Insurance) Act 1969). Businesses and/or individuals can be fined heavily if they do not hold such insurance or if it is not arranged correctly.
Who is an employee…
An example of the definition of an employee within an Employers’ Liability section of cover under most insurance policies is as follows.
Any person while working for the company in connection with the business who is:
· under a contract of service or apprenticeship with the company.
· a person under a contract of service or apprenticeship with some other employer and who is hired to or borrowed by the company.
· a labour only sub-contractor and persons supplied by a labour only sub-contractor.
· a self-employed person performing work under a similar degree of control and direction as a person under a contract of service or apprenticeship with the company.
· a driver or operator of hired-in plant.
· a trainee or person undergoing work experience.
· a voluntary helper.
· temporary or agency supplied employees.
The above list is comprehensive but not exhaustive. If in any doubt, companies should always be certain their insurers are aware of all the people engaged by the business and all related activities are disclosed.
Other responsibilities…
Those classified as employees do not only bring a responsibility to the business from an insurance perspective but also in respect of Health & Safety and Human Resources – essentially treating these people in the same way you would your own direct employees for both the individuals and company’s protection.
In addition to arranging the correct legally required insurance, businesses also need to be compliant in other areas such as the:
· provision of contracts of employment.
· provision and recording of training and supervision.
· communication and implementation of a health & safety policy.
· production and management of risk assessments and method statements.
Time and cost…
It is understood there is a time and cost impact on a business in making sure the insurance and other responsibilities are put in place correctly from the outset. However, these pale into insignificance in comparison to the disruption, time and costs witnessed in defending a position, situation or claim when they happen!
Getting it right from the start is a real positive attribute and feature for a business and one that may either be a requirement of an insurance programme and/or assist towards reducing premium costs.
For more advice please contact…
Noel Preston, Managing Partner
Preston Insurance Brokers, 11 Hollingbury Place, Brighton, East Sussex BN1 7GE
T: 0845 129 7505
M: 07887 404 473
E: noel@prestonib.co.uk
W: prestonib.co.uk