By law, all employers in the UK must have Employers’ Liability (EL) Insurance. However, if you employ close family members to provide your care or support you may be exempt. Please bear in mind that even if you are exempt, the local authority or NHS who fund your DP may “require or advise you” to purchase this insurance. Please check your direct payment agreement and if it is not clear, check with your funder.
Your Personal Assistants (PAs) may be injured or get ill as a result of working for you. If this happens, they might try to claim compensation from you if they think you are responsible. EL insurance covers you for the cost of this compensation.
It is illegal for you to employ PAs without having EL insurance unless you are exempt, and you face a heavy fine if you do not have it. You must display your EL insurance certificate where your PAs can easily see and read it.
There are other insurances that may be considered also covered in this fact sheet.
What is employers’ liability insurance?
As an employer of PAs, you must have valid EL insurance at all times.
You are responsible for the health and safety of your PAs whilst they are working for you, and you must ensure you carry out a thorough risk assessment to remove or minimise potential hazards in your workplace. In some unfortunate circumstances, your PAs (or former PAs) may be injured at work or become ill as a direct result of working for you. If this happens, they might try to claim compensation from you if they believe you are responsible.
Employers’ liability insurance ensures that you have at least the minimum level of cover in case you have to pay the PA compensation and/or legal costs. You must be insured for a minimum of £5 million, although most insurers automatically provide cover of at least £10 million.
What happens if I do not have employers’ liability insurance?
The Health and Safety Executive (HSE) enforces the law on EL insurance. HSE inspectors carry out spot checks to ensure employers have valid EL insurance with an approved insurer for at least £5 million. If they visit you, they will ask to see your EL insurance certificate and other relevant documents.
You can be fined up to £2,500 for any day which you are without EL insurance. If you do not display the insurance certificate or refuse to make it available to HSE inspectors when they ask, you can be fined up to £1,000.
Purchasing employers’ liability insurance
Your EL policy must be issued by an authorised insurer otherwise it will not be valid or legal. Authorised insurers are individuals or companies working under the terms of the Financial Services and Markets Act 2000 and will be a member of the Association of British Insurers. The Financial Conduct Authority (FCA) maintains a register of authorised insurers. You can check whether a company is authorised by searching their register on http://www.fca.org.uk/ or telephoning the FCA on 0300 500 8082 or 0800 111 6768.
In section 3 of this factsheet there is a list of providers that DP customers typically purchase EL insurance from.
EL insurance is the only compulsory insurance however there are other types of insurance that you may wish to consider. Many EL insurance policies offer additional cover including some or all the following features:
- Public liability insurance
- Staffing costs (redundancy, emergency recruitment etc)
- Financial loss (theft, fraud, negligence etc)
- Personal accident
- Legal costs
- Help and advice resources
Most insurers offer a basic policy and an enhanced policy. Basic policies usually just include EL insurance (but some will include public liability insurance) whilst the enhanced policies include additional features such as staffing costs, financial loss cover and personal accident cover.
If you are considering taking out a policy for a specific reason e.g., you particularly want redundancy cover, you should read the exclusions very carefully and check that it still meets your requirements.
Exclusions are limits to the cover which mean that you will not receive a pay-out in certain situations e.g., EL claims may not be paid if they are the result of deliberate or malicious acts and personal accident claims may not be paid if the individual was engaging in certain sports or criminal activity.
Public liability insurance
Public liability (PL) insurance covers you for damages awarded to a member of the public because of injury or damage to their property caused by you (‘the employer’) or your PAs in the ‘workplace’. It usually also covers any related legal fees, costs and expenses.
All the insurance policies featured in section 3 of this factsheet include PL insurance as an additional feature in both their basic and enhanced policies. You must have PL insurance if members of the public will be present in the workplace. (This includes situations where your PA takes you out of your house).
Protecting your home and possessions
Enhanced EL policies often provide cover against damage to your property resulting from theft, fraud or negligence.
If you wish to specifically protect your home and possessions, you should discuss this with the insurer who will be able to advise you on what their policy includes.
Legal expenses insurance covers the cost of pursuing legal action or defending yourself against legal action. The insurer will pay fees and expenses for solicitors, barristers, accountants and expert witnesses, as well as court costs and opponents’ costs if you are ordered to pay them in a civil court.
If you require legal expenses cover, you should discuss this with the insurer who will be able to advise you on what their policy includes.
Some insurers will insure PAs to carry out a wide range of complex healthcare tasks, provided they have proof of appropriate training. If a PA causes an injury to the person they are supporting, this may result in a clinical negligence claim against the PA by or on behalf of the person they are supporting.
Insurance for PAs
There are also specific policies designed to protect PAs from claims against them, for example where the PA accidentally harms the employer (e.g., spilling a cup of hot tea on the employer).
The insurance providers listed below sell EL insurance policies that are tailored for DP customers. However, this is not a comprehensive list of insurance providers, and you may wish to choose another approved provider.
Fish Insurance – Independent Living Insurance
0333 331 3770
Mark Bates Ltd – Premier Care range
01268 200 020