Employers’ Liability Insurance – Start-ups!

While many start-ups are essentially a one-man show, in the beginning, others will have one or more employees. Even a single employee legally obliges the company to take out employees’ liability insurance.

Start-ups may often use the services of freelancers and contractors. An ’employee’, for these purposes, is an individual whom:

  • the business obliges to provide defined levels of service
  • is paid a salary from which the business deducts income tax and National Insurance
  • the business has control of how and when they work
  • the business does not allow to employ a substitute.

This insurance is not required if:

  • the company is not limited and only employs close family
  • it is a limited company with only one employee and the employee owns 50% or greater of the company.

These policies cover against claims made by employees who have suffered injury or illness during the course of their work that was caused by negligence on the part of the employer. Legally, companies are required to have a policy that covers up to £5 million. Policies vary amongst insurers but will generally cover damages, legal fees, compensation, and hospital fees that are recoverable by the NHS.

Public Liability Insurance

This insurance provides cover for injury or damage to the property of third parties that is due to negligence on the part of the business. While it is not legally required for businesses except in special cases such as horse-riding schools, it is generally recommended, especially for those businesses where there is frequent interaction with customers or clients. Public liability insurance pays for similar costs as an employer’s liability insurance but does not cover employees.

Policies are available with a cover of £1 million to £5 million and more. Defective design or products are not generally covered by standard public liability insurance policies, and start-ups that are manufacturing products could benefit from extended coverage to protect them from third-party claims related to these issues. The additional cost of this extended cover will depend on the nature of the business and the products. For example, sporting goods could require a significant increase in the cost of premiums.

A guide to interim management

If you have started your own business recently you will undoubtedly wish to keep your costs to a minimum wherever possible. It may seem unlikely, therefore that you would consider taking on a member of staff for a short period and at a higher rate of pay than your usual employees. Check out Computer Repairs Cleveland we can help your business get higher rankings, grow lead generating potential online and reach new height of profit with our customized SEO strategies.

However, if you examine the facts about bringing in interim managers, you may find it to be a valuable and cost-effective investment and the right thing to do to ensure a good start for your business. Some of the benefits of hiring interim management include:

Gaining an individual who is instantly suitable for their particular role

By bringing in someone when and where you need them, you will find the person with the necessary skills and experience to do the job right now, with no need to consider future paths within your company and no need to take their levels of competence in other departments into consideration. You will be able to hand-pick the right employee from a range of people who are more than qualified to meet your business needs.