What is employers' liability insurance?
Even though you work as a contractor and don't have any employees of your own, it's still very likely that your client will require you to hold employers' liability insurance.
It's true that if a limited company employs only the owner and the owner owns more than 50% of the issued share capital then the company is exempt, but most contracts are standardised and require contractors to have employers' liability insurance whether they actually have any employees or not.
By law, an employers' liability policy is required to carry a minimum indemnity limit of £5 million for any one claim. In accordance with the industry standard, however, Kingsbridge issues cover with a £10 million limit.
It should also be noted that employers' liability insurance is required by law under certain circumstances (if a contractor is employing their partner or spouse for clerical work and paying over the PAYE threshold, for example.) It will also cover you if you have a substitution clause in your contract.
As with public liability insurance, employers' liability insurance works on a 'losses occurring' basis - you'll be covered for any claims pertaining to injury or illness caused during the period of insurance.
It's worth mentioning that although Kingsbridge includes employers' liability insurance in our package, it contributes very little to the overall price of the policy you pay.
You can see exactly what you're covered for with your employers' liability insurance over on our What's Included page.
Do you have any example claims?
It's feasible that an employers' liability claim could be made against a contractor if they employ someone to substitute for them. Employers' liability is a strict liability, so it's more common for a claim to be made by an employee against their employer under employers' liability in the first instance (as opposed to a public liability claim against the person who is responsible.) For this reason, holding employers' liability insurance is important for a contractor.
The spouse of a contractor is working in their home office when a light fitting falls down and injures them. As they would be considered an employee under the terms of the employers' liability insurance, any claim would be covered.