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Is Employers' Liability Required By Law?

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Employers' Liability Insurance

Employers’ Liability is an insurance cover that is required by law if you have any employees working for your motor trade business, or are a Limited Company with more than one Director.

The Law

Any business that has at least one employee needs to have Employers’ Liability insurance, under section five of the Employers' Liability (Compulsory Insurance) Act 1969, offenders can be fined by a Magistrates’ Court up to £2500 per day that cover is not in place,

Exemptions

You may not need Employers’ Liability if the person doesn’t work exclusively for you (e.g. independent contractors/subcontractors who work under their own direction and supply their own equipment & materials), if you do not deduct national insurance or income tax from their pay, or they are clearly in business for the sake of their own personal benefit. However, this is a complicated area and we would recommend that you seek full and proper advice.

When You Need To Get Employers’ Liability Insurance

You will need Employers’ Liability cover if any of the following are applicable to you and your business:

  • If you deduct income tax and national insurance from the wage(s) of your employee(s);
  • If you control where, when and how they work, if you supply their work materials and equipment;
  • If you require that only they do the job and they cannot hire a substitute;
  • If you have a right to any profit they make;
  • Or if they are treated in the same way as other employees.

Penalties

For each day that you do not have the right Employers’ Liability insurance in place you could be fined £2500, and if you don’t make the certificate available to employees, and when asked by Health & Safety Executive inspectors, you can be fined £1000.

Why You Really Need Employers’ Liability Insurance

Not only is it a legal requirement, but it could save you a lot of money if something happened to an employee at your business. Motor trade business premises can be a dangerous place for employees. Places with tools, machinery and equipment that could cause injury, like a mechanic’s workshop, or even a car lot, could potentially be dangerous, which is why it’s important to have the correct level of Employers’ Liability insurance.

Do You Need An Employers’ Liability Insurance Quote?

If you’re in need of Employers’ Liability insurance or you’re unsure whether you need it and want to chat it through with an expert, then get in contact with us today. Our team of specialist motor trade insurance experts will be able to help you get the right level of Motor Trade insurance you need and will assist you in your Employers’ Liability insurance query. Click Get A Quote below or call us on 0800 221 8077.

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