Some confusion exists over this issue but the realities are clearly explained in regulation. In fact, the regulations specify areas where cover may not be refused, for example;
• “any breach of the insurance policy by the employer following the event giving rise to a claim, e.g. failure of, or delay in, notification
• any breach of any enactment by the employer concerning the protection of their employees; or
• failure by the employer to keep records as required by the policy or to provide information from such records for the insurer.
• any lack of reasonable care by the employer to protect employees against the risk of bodily injury or disease”
Other than in extreme cases claims cannot be refused but restrictions can be made, particularly in respect of work which the insurer considers hazardous. The majority of insurers limit the height at which employees may work (still the single biggest cause of workplace deaths) and most also include a standard restriction relating to work with asbestos containing materials (ACM’s). These restrictions can be removed but you will find yourself paying much higher premiums for this privilege.
Restrictions are the key issue here. If you decide to work at height on a project and a restriction exists which you then break it is highly unlikely that the insurer will still have to honour the claim. Make sure you know these restrictions and make sure that your staff and managers know. A one off job or even a favour for a good client could leave you with a very significant bill if restrictions are breached and an accident occurs.
EL cover for micro businesses
If you employ just one person within the business then since February 28th 2005 EL cover has no longer been compulsory. However, consider the following scenario’s in which cover would be needed before cancelling any existing arrangement;
• You hire a part time member of staff to ease your workload over a busy period
• You employ a temp to cover you for a holiday or period of sickness absence
• You get help from volunteer works or work experience students
• You employ a gardener, cleaner or security guard through the business
• You employ an agency worker
Finally always consult with your broker before making any change, failure to meet legal requirements on EL insurance can result in a fine of £2500 per day, over a year this could add up to over £900,000.
