Business clinic: Why employer’s liability cover is essential for everyone

Farmers Weekly‘s Business Clinic experts offer free advice on legal, finance, tax, insurance, farm management and land issues.

Rural affairs specialist Tim Price explains why everyone should have employer’s liability insurance in place, even those without staff.

Q: We run our suckler beef enterprise without any paid help, but I’m told I still need employer’s liability insurance in case someone helping out has an accident – is this right?

A: It comes as a surprise to some farmers that the most important consideration is not protection for their livestock or buildings but liability insurance to cover the risk of being held liable for injuries to people, or damage to their property.

Tim Price
Tim Price
Rural affairs specialist
NFU Mutual

Today’s compensation culture means that many injuries or damages tend to lead to claims for thousands – or even millions – of pounds in damages.

Without insurance protection, this sort of claim and its associated legal costs could lead to bankruptcy.

See also: Advice on the health and safety responsibilities of farm employees

While the risks of claims from a member of the public are widely known, some farmers may not be aware that anyone “helping out” can be viewed in law as an employee in the event of an accident – whether they are paid or not.

Every business in the UK is required by law to put in place employer’s liability insurance for its full-time, casual, seasonal and “odd-job” workers – whether or not they have a formal contract of employment.

Insurance is also required if friends or family members help out with the business – even if it is on a casual basis and they receive no payment.

However, genuine contractors with their own insurance arrangements and who are carrying out work for you in the course of their business will not usually need to be regarded as employees.

It is important to keep your insurance company up to date with changing circumstances in your holding.

If your turnover rises significantly or you develop new enterprises which involve the public coming on to your farm, you may need to increase your cover.

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