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Employer Liability, Directors only

Is Employer Liability insurance compulsory when the only employees are the two director/owners?

Some docs on DWP website suggest perhaps so; yet on the BusinessLink site, it says :-

--------------- "Who is defined as an employee? Generally, someone is your employee if:

- you deduct national insurance and income tax from the salary you pay them - you control when, where and how they work - they cannot employ a substitute when they are unable to do the work"

---------------

Obviously, under this definition the directors are *not* employees!

So, is employer liability cover required or not - does anyone know, and can you point to any link confirming this? Welcome all views.

Reply to
Tim
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The general opinion in the computer contracting field is that it *is* a legal requirement but on the other hand it's completely pointless and valueless as you can't make a claim against yourself so it would never pay out.

So, technically it's required but it has no function. Thus, in practice many one man Ltd. companies don't have it and it doesn't seem to be something that is often checked/investigated.

If you need other insurance (professional indemnity, third party, etc.) it may well be very cheap to include employer's liability as well.

Reply to
usenet

Different pieces of legislation have different definitions for "employee".

All directors are Office Holders, and some (with employment contracts) may be employees.

Unless the premium is horrendous, it may be prudent to have cover anyway?

Reply to
Doug Ramage

If you are referring to a limited company, which I presume from the use of the term director, then you need to treat the company a separate legal entity. It is the company that pays wages (and should be deducting PAYE and NIC), it controls when, where and how people work and it would employ substitutes for people who cannot do the work. The fact that the people who work for the company do these things on its behalf does not mean that they are not employees, although that term has different meanings in different contexts. My view is that employee liability insurance is required but, in any case, it will probably be cheap enough in this situation that it is better to err on the safe side if you are unsure.

Colin Bignell

Reply to
nightjar

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