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Do I need employers’ liability insurance for freelancers?

18 June 2015
Creative Commons man sleeping at a desk by reynermedia_Flickr

Big questions 

It’s time to tackle a question we get asked a lot: if I work with freelancers, do I need employers’ liability insurance?

And it’s a good question. But let’s start with a little context.

What is employers’ liability insurance? 

If a member of staff is ill or injured and it’s happened because they work for you, employers’ liability insurance compensates them for any pain and suffering. It covers the legal costs of dealing with a claim against you, too.

If you have employees, employers’ liability insurance is 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 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’. 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. Without employers’ liability insurance, you’ll have to pay for any damages/compensation yourself.

A little extra help 

If you’re still not sure you need it, 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.

For more information, have a read of this handy guide published by the Health and Safety Executive. Failing that, give us a call, a tweet, or send us a message by live chat. We’re always happy to help.

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