We are often asked if Employers’ Liability (EL) Insurance is required by people running a charity or companies with only volunteers rather than paid employees.
What is EL Insurance?
EL insurance covers against injury or illness to employees arising out of their employment; the law requires it for full-time or part-time employees or volunteers. If an employee were to trip and fall while working for your company, injuring themselves and subsequently making a claim, EL insurance would cover the costs of defending against the allegation as well as compensation payments.
Do I need it?
The Employers’ Liability (Compulsory Insurance) Act 1969 says you do. Under it an employee is someone who works under a contract of service or apprenticeship. This distinguishes them from contractors who must take out their own insurance. Therefore, apart from close family members*, anyone working under your direction – whether on a continuous basis or at an event – must have insurance to cover them against suffering injury – even if they are unpaid work experience staff/interns. It is possible that a Public Liability policy can have extension to cover EL but that is uncommon.
The law is less clear for charities, some believe they don’t need the cover if they don’t have paid staff on their books, but they still have a duty of care to volunteers just as if they were employees. Having adequate insurance in place for volunteers is therefore essential. Therefore, if you are a charity you will need to be sure that your volunteers are covered either by an EL policy or an appropriately designed Public Liability policy.
Do I really need it?
The penalties for not having EL are draconian to ensure compliance. Fines can be up to £2,500 per day! If you are unsure of what to do, act now and speak to your broker, insurer or us. It is important to remember that once you have the EL certificate issued to you by your insurer, it must be either posted where all can see it or sent to everyone. You can be fined if you don’t (about £1000).
The Employer’s Liability (Compulsory Insurance) Act 1969 requires employers to have a minimum limit of £5m, but most policies are for £10m.
What if I need to cover volunteers?
If required, there are a few products you can consider to cover volunteers in your organisation.
- EL insurance. This provides cover for the organisation if a volunteer is harmed due to the organisation’s negligence – check the policy is properly worded
- Public Liability insurance. This covers the organisation and the volunteer if a third-party is injured through the volunteer’s actions. (Check the definition of employee includes volunteers).
- Professional Negligence insurance. If your organisation delivers services such as advice, specifications, training or design work for a fee, this provides cover for cases of physical injury or financial loss claimed by your clients as a result of these services. This cover only usually applies to employees, so if volunteers provide services on behalf of your organisation you will need to speak to your insurer to make sure you have appropriate in place.
When you are looking to buy insurance to cover volunteers, always check that the insurance policy documents explicitly include volunteers. Make sure to check if there are upper/lower age limits for volunteers and check the insurance policy covers the types of activities that your volunteers will be doing. If you conduct a risk assessment for each of the roles that volunteers will be performing, this will help your insurer tailor your policy to your specific needs. We can help with your insurance needs – just call us at 0800 029 3585 or fill out our contact form.
*EL is legally required for all businesses unless it’s a “one-person band” or only close family are employed. This includes spouses, parents, grandparents, brothers and sisters, children, grandchildren and step-relations. Cousins or partners (without civil formalities) are not included even if living together.