Is Your Business Growing?

By SME Insurance

Posted 28/04/15

Statistics from the Department of Business, Innovation and Skills (November 2015)* show that small businesses accounted for 99.3% of all private sector businesses in the UK at the start of 2015 and 99.9% were small or medium-sized (SMEs). Total employment in SMEs was 15.6 million; 60% of all private sector employment in the UK and the number of employing businesses increased by 35,000. There were a record 5.4 million private sector businesses at the start of 2015, which is an increase of 146,000 since 2014 and 1.9 million more since 2000. Therefore the SME market certainly looks like it is on the up!

Growth and progress often result in recruiting new employees, but this can carry additional responsibility. When employees are working for you, in most cases you are responsible for their health and safety whilst at work. For most businesses, employer’s liability insurance is a legal requirement and protects you as an employer against the costs and compensation if an employee has an accident at work or is injured whilst working for you, if the accident or illness is deemed to be partly or fully your fault. Your liability can be triggered by something as simple as a wet floor without the appropriate warning sign. 

It is also important to note that an employer’s liability claim could be made even if the claimant is a voluntary helper, person undergoing work experience, or is self employed but working under your supervision. It is therefore crucial that your employer’s liability insurance extends to include anyone who works for you in whatever capacity.  

When illness or injury affects an employee, even the most vigilant employers can be sued for damages under their employer’s liability insurance. It is key to make sure that your business is as risk free as possible and all health and safety procedures are followed to help minimise the potential for claims. The Health and Safety Executive (HSE), enforces the law on employers’ liability insurance and HSE inspectors can check that you have adequate cover. They may also ask to see your certificate of insurance and other insurance details. There are significant penalties for non-compliance.

The Employers’ Liability (Compulsory Insurance) Act 1969 requires that you have at least a minimum level of £5m cover against any such claims. In practice, most insurers typically offer cover of at least £10 million. While that might sound like a lot, claims may consider lifetime care required by injured employees and their lost income. These costs can be particularly severe if several members of staff are involved.

If you do not currently have employer’s liability insurance and have employees you should take action now. If you already have insurance in place, it may still be a good idea to review it. More generally, regular risk assessments and a proactive approach to compliance with the health and safety regulations for your industry will hopefully reduce the likelihood of any future employers’ liability insurance claim.

SME Insurance Services offers a combined business insurance policy covering property and liability risks. By purchasing a “packaged” policy this could reduce the overall cost of insurance, compared to taking out the cover separately. It can also make your administration processes easier now and at the time of renewal. 

To discuss your individual business insurance requirements, please call us, or email

Posted 28/04/15

Author: SME Insurance

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Fullers Bakery has used SMEi for the last 3 years for both business premises and motor insurance. The changeover from our previous insurers was seamless and efficient with queries and special requirements all handled very professionally. We have just entered our third year of cover with CBAIS and based on the previous two years, we look forward to a continued healthy working relationship well into the future.

George Fuller

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