New research results suggest that over 160,000 UK micro businesses and SMEs (with one to nine employees) will not have mandatory Employers’ Liability Insurance by the end of the calendar year.
The figures, produced by Smart Money People, represent organisations that do not currently have a valid Employers’ Liability Insurance policy, combined with companies who do not expect to renew their existing policies in 2023.
Given the legal requirement for employing businesses to hold such insurance cover, the figures reported in the research present potential problems for thousands of employers across the UK.
As it stands, the Health & Safety Executive (HSE) are able to issue fines to non-compliant companies, to the tune of £2,500 for each day uninsured.
Speaking to the research results, Jacqueline Dewey, the CEO of Smart Money People, said that: “In most cases, Employers’ Liability Insurance is a must.
“We realise that some small businesses, particularly those at the smaller end of the scale, might understandably be trying to save money at present.
“However, this is one of those cases where insurance is non-negotiable.”
Who Needs Employers’ Liability Insurance?
According to government documentation, as soon as a UK business becomes an employer, they must immediately get Employers’ Liability Insurance.
It is required for policies to be issued by authorised insurers, with minimum coverage levels set at £5 million.
Employers’ Liability Insurance helps businesses pay out compensation claims, if an employee is injured or becomes ill at work.
In addition to the daily fines the HSE can issue to non-compliant businesses, companies holding a policy can also be hit with a £1,000 fine, if they fail to display their insurance documentation or refuse to make it available to inspectors, once asked.
There are a small proportion of businesses that are exempt from taking out this type of insurance policy, such as those who only employ one family member or have one employee that is based abroad.
If you’re a UK business that employs staff, you should be on top of your insurance requirements to mitigate any future business risks birthed from potential fines or compensation claims.
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
