Employers have a legal obligation to carry Employers Liability Insurance which indemnifies the employer in respect of injury to its employees for which it is legally responsible. It is generally accepted by members of the Association of British Insurers that the minimum indemnity limit should be £10m. An employee is deemed to be any individual under a contract of service or apprenticeship with the insured, whether the contract is actual or implied.
There is a common misconception that Employers Liability is not required for subcontracted labour. For Marquee Companies this is invariably not the case because under the terms of the relevant law, if the employer has direct control over the activities of such persons or provides tools or equipment for them to use, then the employer can be liable. Employers Liability is not normally required in respect of ‘Bonefide’ contractors, who will complete a given job without supervision, using their own tools and equipment. Typically these jobs will form part of the overall contract, for example, provision of an erected marquee, installation of lighting or sound systems, or catering. It is important to ensure that these contractors have their own appropriate insurance cover in force.
The legal penalties of failing to effect adequate Employers Liability insurance are severe, but perhaps even more significant are the implications of the potential cost of a successful claim against an uninsured company. In an increasingly litigious society, personal injury claims are becoming frequent and of greater magnitude.