You know what it’s like running a small business, and of course, you’re struggling to make ends meet so you think about skipping a few “compulsory” expenses. But is it really a good idea? What happens if you fail to take employers’ liability insurance?
First of all, we need to define what exactly IS employers liability insurance? Also known as workers compensation, employers liability insurance is a policy that protects the company if someone is injured or killed in the process of doing their job. If they can’t work but still need to make their payments, they file a claim against the company and the insurance policy pays out all the expenses, including medical insurance, lost wages and other claims that the injured party has.
Now what happens if someone has no insurance? Possibly, nothing. But more likely, when the inevitable does happen and a claim is filed, the company itself may be on the hook for all the expenses, which may be quite a hefty sum. If a person is injured and sues the company for £1,000,000, the courts may award the full amount of the damages to the wronged party. In addition, there may be fines tacked on to the company, since most businesses require employers liability insurance in order to operate.
It’s just too risky. Find a good quote and look over the employers liability insurance policy to see exactly what is and isn’t covered. Most policies have a standard definition, like they will not cover a wrongful termination under sexual discrimination, but most things that are not blatant violations of laws by corporations will be covered. Be sure that you get the right policy for your business and stay protected. There’s an old saying that insurance is expensive to own and more expensive not to own. In reality, shopping around means that insurance can be affordable, but it’s expensive not to own it.