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Employers' Liability Insurance: Getting it Right

Employers' Liability Insurance: Getting it Right
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Employers' Liability Insurance: Getting it Right


A study of 115 small businesses carried out by the Forum of Private Business (FPB) recently discovered that 59 per cent believe that a review of the regulations surrounding health and safety would be beneficial. A further 28 per cent believe that health and safety regulations are excessive and many feel that health and safety insurance is a burden to them.

Small business owners would be quick to point out that in addition to the requirement of having employers' liability insurance they also need to arrange public liability insurance, especially if they deal with members of the public. A further requirement may be professional indemnity insurance, particularly if a business is involved in one of the service professions. While these may not always be a company's first consideration, these policies can safeguard an organisation's finances should a claim be brought against it.

For a small business to get a reasonable premium for their employers' liability insurance, it needs to show it has considered the health and safety implications of the workplace for its employees. According to the FPB survey, business owners feel they need more support to be able to do so. Sixty-three per cent felt that more support regarding risk assessments would be helpful, while 33 per cent wanted an accreditation scheme for health and safety consultants to ensure they were getting their money's worth when they employ them.

It was also found that 18 per cent of respondents were not sure if their business was complying with current health and safety legislation, while four per cent cannot be sure that employees understand company procedures.

A spokesperson from the FPB explained that health and safety laws are often aimed at large businesses with many employees and may not always be practical for small businesses with fewer members of staff.

In addition, the FPB also commented that the expected public sector cuts which may affect public services, such as emergency services, may affect the ability to comply with health and safety legislation or make it prohibitively expensive.

Meanwhile, the government has suggested that it will look into health and safety legislation and remove some of the bureaucracy surrounding it. The Conservatives have said that slashing the red tape will lead to businesses being able to generate more income. Currently, small businesses pay 12 billion each year to help them comply with health and safety legislation.

If these changes allow small businesses to move away from concentrating on health and safety and focus on their business, then it can only be a positive thing. What looks almost certain is that businesses will need to start considering their liability insurance policies more carefully, particularly with increasingly prominent claims culture.

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