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Do I need employers’ liability for freelancers?


A freelancer asks for help as he doesn't know whether he needs employers' liability insurance

Everyone needs a little extra help from time to time. Which brings us to a question we get asked a lot: do I need employers' liability for freelancers?

And it's a good question. But first, we need a little context. Because where employers' liability insurance (EL) is concerned, one size doesn't always fit all.

What is employers' liability insurance?

If a member of staff is injured or ill, and they say it's because of the work they do for you, they can make a claim against you. What employers' liability insurance does is compensate them for their pain and suffering, and cover all the legal costs of dealing with a claim.

And there's more. Because if you have employees, employers' liability insurance isn't just nice to have but a legal requirement. The Health and Safety Executive can dish out a £2,500 fine for each day you're without cover. That's on top of the £1,000 fine for not displaying a valid certificate. Ouch.

But what about employers' liability for freelancers?

According to the HSE's definition, an 'employee' is someone whose National Insurance and income tax is arranged by their employer.

Using this definition, a freelancer isn't technically your 'employee'. So, if your business works with freelancers, but you have no other employees, employers' liability insurance isn't a legal requirement, and the HSE can't fine you for not having it.

So I don't need it then?

There's a little more to it than that.

If you never see the freelancers you work with (because you only work with them 'virtually'), you don't need employers' liability insurance. That's because you're not in control of their working environment. You can't be responsible if they get a work-related illness or injury.

It's different, however, if freelancers work at your place and use your equipment, and if you're in control of what they do. In these situations, you're responsible for their health and wellbeing while they're at work.

That means you're potentially liable if one of them comes a cropper. Say someone claims a bad back injury from sitting long hours in a non-ergonomic chair. Or from lifting a heavy box.

Without employers' liability insurance, you'll have to pay for any damages/compensation yourself. Most likely you'll also need to buy some legal expertise, especially if you want to contest the claim.

A little extra help 

If you're still not sure you need employers' liability for freelancers, try this straight-from-the-horse's-mouth guidance.

Our own employers' liability insurer uses the following definition of 'employee':

Any person working for you in connection with your business who is:

  • Employed by you by a contract of service or apprenticeship
  • Hired to or borrowed by you
  • Self-employed and working on a labour-only basis under your control or supervision
  • Engaged by labour-only subcontractors
  • A labour master or person supplied by him
  • Engaged under a work experience or training scheme
  • A voluntary helper

If any of these sound familiar, you should consider getting employers' liability insurance.

We've got more about employers' liability insurance and freelancer insurance. Or, if you prefer to talk, give us a ring on 0345 222 5391.

Image used under license from Shutterstock.

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