In a world of increasing costs, rules and regulations, it is sometimes tempting to reduce the burden of expense by cutting back on unnecessary items. Employers’ Liability Insurance is often seen as an expense that can be dispensed with.
“To think this is a false economy,” says Haf Rowley of H&H Insurance Brokers. “In saving a few pounds you could incur costs that will ruin your business.” In this article, Haf explains the background to employers’ liability, and how it is that some farmers believe that this is just one more cost that the business can easily do without.
Employers’ Liability Insurance is designed to cover the employers’ risk and any subsequent financial losses in the case of accidents causing injury. With farms reducing their labour force thanks to increased mechanisation and the use of part time, self employed or family members as workforce, the temptation to save on this form of insurance is great.
“There are two issues here,” says Haf. “The first is failing to ensure that anyone who is on your farm could be injured, and that the law specifically makes you responsible should the worst occur. The second concerns the issue of who is and is not employed by you.”
The first mistake a farmer might make in this area is assuming that someone who is self-employed does not count as an employee. According to the law, anyone working on your premises, using your equipment, and carrying out your instructions, is your employee. For the purposes of liability when accidents occur, it does not matter whose books they are on or who pays their taxes.
The second mistake covers the odd member of the family, or friend, that puts in some hours helping you out when you’re busy, or is called in to do tasks that no one else is able to. They are counted as employees too. If anything happens, you will have to pay.
Employer’s Liability & Public Liability are essential, what is more important than protecting the needs of your key asset, your employees, if they get hurt while working for you.
Compensation costs [especially if there are legal fees involved] can quickly mount up to hundreds of thousands – and beyond. Premiums, on the other hand, generally start around £125 per annum, and can vary according to the wages of your staff, and the safety record on the farm. Manage your risk assessments effectively, and keep people safe, and you can expect to pay less.
Even when there’s only you on the place, you can’t afford to be without cover – your liability extends to anyone who can demonstrate you acted as their employer, especially if you instructed them and gave them a hand or lent them tools to carry out a job.
So never mind if they are on your books, or are from an agency or a labour-only contractor, contact a professional to see what the safe level of liability cover for you should be.