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Landlords and employers' liability cover

Do you employ anyone to help run your buy to let business - a cleaner perhaps, or someone who helps in the back office with the administration? You have an obligation for the health and safety of anyone whilst they are working for you and your negligence of such a duty of care may be used as the basis of a claim against you for compensation.

With very few exceptions, therefore, the law requires that you hold employers' liability insurance to ensure that you are able to meet the cost of any claims arising from their being injured or falling sick as a result of the work they do for you.

Because these kinds of claim may assume very significant proportions - especially where a long-term illness is concerned - and in order to ensure that you are able to meet any such claim, the law requires that you hold cover for at least £5 million.

At the time of writing, you do not need this cover if the employee is a member of your immediate family or if his or her normal place of residence is overseas.

As the government website government website makes clear, however, the penalties for failing to arrange employers' liability insurance are potentially very onerous - up to £2,500 every day that you have employed someone without having the appropriate insurance and a penalty of up to £1,000 if you fail to display your certificate of employer' 'liability insurance or are unable to produce it at the request of an official inspector.

Arranging employers' liability cover

Employers' liability cover is typically a standalone form of cover arranged entirely separately for just that purpose. Nevertheless, there are some providers of landlord insurance - such as those of us here at UKinsuranceNET - who include the cover as a standard feature of their policies - on the basis that those landlords who do not yet employ anyone to help in the running of their business may soon be likely to do so.

When considering the cover you need, you may want to take into account that the Employers' Liability (Compulsory Insurance) Act of 1969 is updated from time to time by revised regulations - the current Employers' Liability (Compulsory Insurance) Regulations, for example, are dated 1998.

Amongst the conditions these regulations set are:

  • a minimum level of cover of £5 million;
  • the requirement of insurers to insurers to issue a certificate of insurance - within 30 days of the cover being arranged;
  • the obligation to display the certificate at the employer's place of business;
  • the production of certificates to an inspector; and
  • the special cases of those few employers who are exempt from the requirements of the principal Act.

It may be clear, therefore that the law regarding your obligation to hold the right kind of insurance cover, up to the prescribed minimum limit, may be quite complicated.

Even when you have arranged employers' liability cover, or it is included within your landlord's insurance policy, that is by no means the end of your responsibility for the health and safety of your employees. You have a duty to continue to assess any risks to which employees may be exposed and to take all reasonable steps to protect them. If your insurer has grounds for thinking that you have failed in this duty in some way, the insurer is still obliged to pay out on the employee's claim, but may then sue you to reclaim any amount paid in compensation.

In order to ensure that you stay the right side of the law, therefore, you might want to consult a specialist in the provision of insurance for landlords and seek advice about the best way of complying with what might at times become quite complicated regulations.