Specialist insurances and IR35 advice
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Public (& Employers) Liability (PL and EL) insurance are two one of the main insurances required by a wide range of roles undertaken by contractors, freelancers and consultants, and are designed to provide cover for legal representation and damages arising from claims made against your company in respect of bodily injury or damage to property suffered by third parties (PL) or employees (EL). End clients will usually specify that you have Public Liability insurance, often with a limit of indemnity of at least £1m, if not £2m or £5m, in place before signing a contract. They may also specify that Employers Liability insurance is in place, with a minimum limit of £5m or £10m. EL is, in fact, the only business insurance you're legally obliged to have should you employ anyone through your limited company.
It's a common misconception that the PL insurance of a given agency extends to cover the contractors on their books. The majority of the time it doesn't, which leaves the contractor open to claims and enormously exposed, which is why having PL & EL insurance is essential.
We’ve curated a set of contractor guides to provide advice on how much cover you need, comprehensive explanations of terminology and situational examples to help you tailor your business protection. Being your own boss means being directly responsible for any errors or omissions you make – use our Knowledge Hub to do your research.
Our Professional Indemnity (PI) product is one of the best on the market for the trades we cover and the price we charge. Premiums start at just £44.00 (inclusive of Insurance Premium Tax) for Public Liability, and £84.00 (inclusive of Insurance Premium Tax) for Public (& Employers) Liability. In addition, the excess payable in the event of a claim can be reduced from £500 to £0. Our policies are underwritten by some of the largest insurers in the world and have claims handled by top UK legal firms, meaning that our Public (& Employers) Liability offering is as good as they come.
Our fully comprehensive policy offers the
Employers Liability as an Optional Add-On
The following cover is provided as standard for the Employers Liability extension for all trades:
Ability to Reduce the Excess to Zero
|For just an additional £10.00 you can reduce the excess payable by you in the event of each and every claim down from £500 to zero, providing you with the peace of mind that there is nothing payable should the worst happen.
Tailored for Contractors, Consultants and Freelancers
All of our policies have been specifically designed for the exact needs of modern-day contractors, freelancers and consultants. Backed by one of the UK's largest insurers, our policies provide complete protection against the most common perils your business faces in today's world.
Public liability insurance provides protection against the end client, the general public and people the business visits who make a claim that alleges personal injury or property damage. It is therefore integral for those contractors who interact regularly with customers. The end client of every contractor is their customer given they are providing services to them, meaning they at the very real risk of a claim being made against them.
Larsen Howie combines employers liability insurance as an optional extension to our Public Liability insurance, meaning it cannot be purchased in tandem – which is standard within the market.
Public liability insurance is often mistakenly thought of as only being required if your business operates from an office, but those without an office are still at a high risk of having a claim made against them, often through something as minor as someone tripping over their laptop bag or damaging property of the end client. No matter how careful you are, accidents will always happen, and contractors working in trades which involve manual work are virtually always requested to hold public liability insurance at all times as a result.
Public liability, unlike employers liability, is not a legal requirement. However, virtually all contractors take it out either because end clients and agencies insist that a contractor hold Public Liability insurance before they are allowed to commence on a contract, or they prefer to obtain the protection and peace of mind having the insurance in place come what may.
Public liability covers your business for any claims made against you by the end client or members of the general public, typically for personal injury, serious illness or accidental death, or damage to their property. The policy reacts by covering the legal costs in defending the claim as well as paying the damages for which you are found liable, the costs of repairing the damaged property, or even NHS costs i.e. the ambulance call-out, if they decide to make a claim against you.
From an IR35 perspective, a business strengthens its IR35 status by holding public liability, with some contractors feeling it is prudent to have this insurance in place even if the end client or agency do not request it.
Accidents happen on a daily basis, we just think that we are careful and therefore it won’t, or is unlikely to happen to us. The truth is that it can happen to any business, and when it does it becomes the very real problem of vast legal fees and compensation for the business owner to sort out, meaning a lot of stress and financial worry. Slips and trips are in the news every day and are one of the most common accidents that occur, it could even be a result of tripping over your laptop bag or a tool. public liability insurance takes away this hassle and provides peace of mind to allow you to continue doing what you do best, obtaining and working on contacts.
There is no legal or set requirement on the minimum level of indemnity that is required, but most providers offer, and end clients and agencies expect, a limit of £1,000,000. Limits of £2,000,000, £5,000,000 and even £10,000,000 are offered and commonplace for contractors.
Public liability insurance won’t cover you for accidents that happen to you personally or your employees, or you, your business and your employees’ property. Employers liability and general business insurances should be taken out to ensure cover is in place for these.
Employers liability insurance provides protection against the contracted employees of a company i.e. full time, part-time, contract, temporary, casual and seasonal staff, making claims that allege personal injury or illness through work, making it integral for those contractors who have more than just themselves working for the company.
Larsen Howie combines employers liability insurance as an optional extension to our Public Liability insurance, meaning it cannot be purchased on its own – which is standard within the market.
Employers liability is a requirement for any company that has any employees be they permanent, part-time or temporary workers as you have a responsibility for their health and safety as their employer. If you a Limited Company and you are the single employee and own at least 50% of the issued share capital of the company then you are exempt from having to hold employers liability, meaning ns that if you are the stereotypical one-man-band business that employees only you, this insurance is not required.
It is not uncommon for end clients and agencies to insist that a contractor hold employers liability insurance, as an extension to a public liability insurance policy, before they are allowed to commence on a contract.
Employers liability covers your business for any claims made against you by employees or sub-contractors, typically for personal injury, serious illness or accidental death sustained as a result of their employment with you, reacting to cover the legal costs in defending the claim as well as paying the damages for which you are found liable*.
*Note – if your insurer believes that you have failed to meet the health and safety legal responsibilities for your employees that lead to a claim being made, they may sue you to recover the cost of the compensation.
From an IR35 perspective, a business strengthens its IR35 status by holding employers liability, with some contractors feeling it is prudent to have this insurance in place as they may engage their right to substitution and therefore need cover as a result.
In England, Scotland and Wales, The Employers’ Liability (Compulsory Insurance) Act 1969 makes it a legislative requirement for a business that employees anyone to have a minimum level of £5,000,000 cover in place.
The 2004 amendment to this act provided the exemption for what is in effect one-man-band Limited Company’s not to have to hold Employers Liability.
You only need employers liability insurance if your employees are normally based in England, Scotland or Wales, including offshore installations and association structures. If all your employees work abroad you do not, therefore, need the insurance under UK law, however, you will need to check the relevant legislation for the country that they are based to ensure they are protected as required. If you have employees who are normally based abroad but are in England, Scotland or Wales for more than 14 continuous days (or more than 7 continuous days if on an offshore installation) you will need Employers Liability for them.
A business is required by law to display a copy of their employers' liability certificate so that employees can easily read it, which since the 1st October 2008 can be electronically as long as employees are informed how and where to find the certificate. Also since the 1st October 2008 there is no longer a legal requirement for employers to keep copies of out of date certificates, although it is prudent to continue to do so given that some illnesses occur decades after exposure and some employees will make a claim against the employer at the time they were exposed to the cause of the illness.
If you are required by law to hold employers liability and do not, if caught by the Health & Safety Executive (HSE) you can be fined up to £2,500 for each day you are without the required insurance, whereas not displaying or providing the HSE inspector with, or clear and easy access to, your employers liability certificate can result in fines of up to £1,000.
Further information, including the text of the Act and the regulations, can be found online at http://www.legislation.gov.uk./
For those based in Northern Ireland, The Health and Safety Executive for Northern Ireland (HSENI) enforces the law on employers liability insurance. HSENI inspectors can check that you have employer’s liability insurance in place for at least £5,000,000 - as per The Employer’s Liability (Defective Equipment and Compulsory Insurance) (Northern Ireland) Order 1972. However, it is best practice to carefully consider the risks and liabilities you face and if insurance cover of more than £5,000,000 (we offer £10,000,000 as standard) would be appropriate.
Further information for those based in Northern Ireland can be found online by clicking here.
Where it is required, the legal obligation is to have a minimum limit of indemnity of £5,000,000, but most providers offer £10,000,000 as standard.