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Your insurance queries, answered

16/05/2014

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Fingers on buzzers 

It's not news to us that insurance can make you feel woolly-headed.

To help you on your way to insurance enlightenment, here are a few questions we've recently been asked – and their answers. If one person's confused by something, there's probably loads more people who just haven't asked yet.

This post is a bit of an 'employers' liability insurance special'. As it's the only compulsory type of insurance, it's worth getting your facts straight.

1. What's retroactive cover? Why do I need it? 

Retroactive cover is a sort of backwards extension to your professional indemnity insurance. It allows you to stretch your PI back to a date in the past, before you actually took out the policy.

This means that work you did before your policy's start date, and after the retroactive date, is covered.

It can take months, or even years for PI claims to develop. Even if you completed a project six months ago, it doesn't mean a big problem won't rear its ugly head. This is especially true if you work in areas like architecture, engineering, or surveying.

2. Can I get a 'no claims discount'? 

We've had a few customers ask us if we can offer a discount on their insurance, as they've never made a claim.

Sadly, business insurance – especially professional indemnity – doesn't work like that.

3. Do you really need this much information from me? 

We've actually answered this one before, but yes, we do.

It's important we ask about anything that could have an impact on your insurance. Failure to tell us everything might save you a bit of short-term time but, worst-case scenario, it could invalidate your insurance if you claim.

That's what they call a 'false economy'.

4. Do I need to tell my employees that I have employers' liability insurance? 

You don't need to specifically 'tell them', no.

Creative Commons slow working by Eric Schmuttenmaer_Flickr

But you do need to display your insurance certificate somewhere they can read it. You also need to make it available to HSE inspectors if they ask for it. Failure to do either of these can result in a £1,000 fine from the Health and Safety Executive. 

5. Do I need to keep past employers' liability insurance certificates? 

It used to be a legal requirement that businesses kept their old employers' liability insurance certificates for 40 years. This was because it can often take time for work related illnesses to develop. However, as of October 2008, this is no longer the case.

That said, we do recommend keeping hold of them for your own records. This is because you may still be liable for illnesses or injuries sustained by past employees, many years after the damage occurred. Without them, you may find your ex-staff very insistent that you pick up the tab for their medical bills.

6. If I hire more employees, do I need to update my employers' liability insurance? 

Sort of.

Your level of cover stays the same but how much you pay depends on your company's annual payroll figure. Generally speaking, the higher your payroll, the more you'll pay.

If you have a continuous policy (you don't renew it each year, it just rolls over) your policy wording will likely include a 'maximum allowable payroll figure'. If you take on more people, pushing your payroll above this maximum figure, get in touch and we'll see how and if it makes a difference. As a heads up, again, it's likely your premium will increase.

7. How much employers' liability do I need? 

The compulsory amount specified by the HSE is £5 million.

However, you'll find that the minimum level of cover offered by most insurers is £10 million. Don't worry, they're not trying to fleece you; historically, £5 million isn't really enough cover.

8. Does employers' liability include asbestos cover? 

If you're just looking to buy employers' liability insurance that covers your employees from the effects of asbestos in buildings, you may be able to get cover. Some insurers don't specifically exclude asbestos risks from their policies, but are often reluctant to offer cover.

In other cases, insurers will offer it, but they'll limit the level of cover to something like £5 million. As we mentioned above, that's not very much cover; especially not when you're dealing with something as nasty as asbestos. Many other insurers simply don’t offer it.

If having asbestos cover included in your employers' liability insurance is something you're particularly concerned about, it's worth calling your insurer or broker. Even if they can't arrange cover, they may be able to recommend someone who can.

That's it for now. If you have a question, give us a call and we'll do our best to answer it.

If you liked this, you might like thesethis...

Professional insurance Q&A
Where do you start with professional insurance? Or finish, come to that? Our guide to what you do and don't need will help you decide.
What insurance do I need for my business?
What business insurance do I need? What don't you need, more like. If you're after a more helpful answer than that, try reading this.
Employers' liability insurance guide
Employers' liability insurance protects you if employees claim for injuries and illnesses they suffer at work. Get it of get a fine from HSE.

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