If you either run a business or operate as a sole trader and have employees, you are legally required to have in force valid, and suitable, employers liability insurance. This is common knowledge amongst most business people, but the question we get asked most is what is the legal limit of indemnity required?
With access to information over the net, it wil only take you a few minutes to find a few sites that tell you a bit more about this cover. However, the answers and information you may see can be slightly confusing.
The first fact is that you need the cover if any working for you, whether they are paid or not, whether they are only part-time or whether they are only temporary, they fall under the definition of employee. Business insurance policies will always have, usually near the start, a few pages devoted to definitions. As the policy is a lengthy, and legal, document the insurance company is obliged to define certain things. For example, it will define what a building is, what stock is and how gross profit is calculated, as far as the cover is concerned.
There will also be a definition of employee, and this will always be quite wide.
You must have cover for a minimum limit of indemnity of £5,000,000 in respect of each and every claim. ie potentially you could have 8 claims at £4,000,000 or 17 at £3,000,000 etc etc. Most UK insurers have a standard minimum limit of indemnity of double this, at £10,000,000.
The problem, that causes some confusion, is that your certificate of employers liability, will only state on it the legal minimum, ie £5m. It is in the policy wording and schedule where it states that you have the increased cover at £10m.