Employers Liability Insurance

[psychocandy]

I was wondering this the other day when my insurance came up for renewal.

Previously, I paid for PI, PL, and EL through QDOS. Then I noticed, that, strictly speaking, I didnt need EL. However, it only saves £42 or something.

So I checked my contract and it said I needed adequate EL insurance which could be taken to mean, because I'm exempt then I dont need it so cover is adequate anyway.

But then again, malvolio has a point about subbies. And its only £42 so I'm just going to leave it alone.

[Waldorf]

I vote qdos as well, just get a combined package and then forget about it.

[psychocandy]

Go check out QDOS. IF you don't have PI/PL already they do a very competitive bundle, or you can just go for the ELI, £10m as standard. £42+change. Just taken insurances out myself and they were the cheapest quote by a significant margin.

Vote for QDOS. I'm sure its under £20 a month for the full monty anyway.

[malvolio]

I had you down as more of a Tellytubbie in la la land but there you go.

All very fine and Dandy (geddit) but...

I was talking about RoS. For that to work as an IR35 defence the subbie has to be paid through YourCo (net or gross) and they are doing your job for YourCo, not delivering some subsidiary service. On that basis, ELI is required.

[Wanderer]

This turned up quite recently. It doesn't only cover employees. If you have a valid RoS, you need ELI to cover any subbies you may bring in: without it you can argue that your RoS is a sham.

I can't speak for other contractors but when I engage subbies its on a B2B basis, not as an employee on PAYE or self employed so I don't legally need ELI. They only reason I get it (and this is the deciding factor) is when the client demands that I have it. If the client refuses to do business without it then you pretty much have to get it so the whole argument is a bit moot.

There are lots of references to back this up, reading SueEllen's link, someone is generally defined as your employee if:

• they are under a contract of service
• you deduct National Insurance contributions and income tax from the salary you pay them
• you control when, where and how they work
• they cannot employ a substitute when they are unable to work

None of this applies to my subcontractors, though of course other people may operate differently.

You can also read it direct from the HSE where they say:

You may not need employers’ liability insurance for people who work for you where:

• they do not work exclusively for you (for example, if they operate as an
• independent contractor);
• they supply most of the equipment and materials they need to do the job;
• they are clearly in business for their own personal beneit;
• they can employ a substitute when they are unable to do the work themselves;
• you do not deduct income tax or national insurance. However, even if someone
• is self-employed for tax purposes they may be classed as an employee for other
• reasons and you may still need employers’ liability insurance to cover them.

I'm making it all up. I know nothing about contractor legalities and only read the Beano.

I had you down as more of a Tellytubbie in la la land but there you go.

[Contreras]

Two options:

• I'm making it all up. I know nothing about contractor legalities and only read the Beano.

• I know what I'm talking about, having done the research and made the effort to learn company law

Which do you think is the right answer.

SueEllen already posted one link, here's another: Insurance and contractual issues when using contractors and subcontractors | Business Link

[v8gaz]

Two options:

• I'm making it all up. I know nothing about contractor legalities and only read the Beano.

• I know what I'm talking about, having done the research and made the effort to learn company law

Which do you think is the right answer.

So do you prefer Dennis the Menace or Lord Snooty?

[DaveB]

I have to take out £5m of cover for my non existent employees

Go check out QDOS. IF you don't have PI/PL already they do a very competitive bundle, or you can just go for the ELI, £10m as standard. £42+change. Just taken insurances out myself and they were the cheapest quote by a significant margin.

[BoredBloke]

Packages of insurance are much cheaper.

So generally you will find that if you need PL and PI then adding EI costs nothing.

BTW legally you may be exempt from having to take out EI if you don't have any employees. linky So if you are exempt then by not having it you comply with the law.

I have to take out £5m of cover for my non existent employees

[malvolio]

That is just so plainly wrong:

- You can take out ELI at the point which it is needed.
- If the subbie is another contractor they are not your employee.
- It can be argued the RoS is a sham anyway (and it usually is).
- ELI does not cost fourpence.

Are you on a wind-up?

Two options:

• I'm making it all up. I know nothing about contractor legalities and only read the Beano.

• I know what I'm talking about, having done the research and made the effort to learn company law

Which do you think is the right answer.

[SueEllen]

Packages of insurance are much cheaper.

So generally you will find that if you need PL and PI then adding EI costs nothing.

BTW legally you may be exempt from having to take out EI if you don't have any employees. linky So if you are exempt then by not having it you comply with the law.

[DaveB]

That is just so plainly wrong:

- You can take out ELI at the point which it is needed.
- If the subbie is another contractor they are not your employee.
- It can be argued the RoS is a sham anyway (and it usually is).
- ELI does not cost fourpence.

Are you on a wind-up?

Irrelevant of any of the above, if having it is a condition of the contract then you need it.

It does't just cover Employee's, it covers anyone working on your behalf so your average contractor subbie is also covered.

Your RoS may be a sham, mine isn't.

£10m ELI cover costs £42.48 from QDOS. Not quite 4 pence, but close enough. It's the Professional Indemnity that gets expensive.

[Contreras]

If you have a valid RoS, you need ELI to cover any subbies you may bring in: without it you can argue that your RoS is a sham. Since it costs fourpence anyway, it's not worth arguing about it

That is just so plainly wrong:

- You can take out ELI at the point which it is needed.
- If the subbie is another contractor they are not your employee.
- It can be argued the RoS is a sham anyway (and it usually is).
- ELI does not cost fourpence.

Are you on a wind-up?

[malvolio]

I've just been told that I have to take this out. Is there much point having employers liability insurance when I don't have any employees

This turned up quite recently. It doesn't only cover employees. If you have a valid RoS, you need ELI to cover any subbies you may bring in: without it you can argue that your RoS is a sham. Since it costs fourpence anyway, it's not worth arguing about it

[BoredBloke]

I've just been told that I have to take this out. Is there much point having employers liability insurance when I don't have any employees