How your workers’ employment status impacts your insurance
The gig or sharing economy is comprised of organisations that hire independent workers for short-term positions. Common jobs include food delivery drivers, car journey drivers, web developers and translators. In the United Kingdom, approximately 5 million people are employed in this fashion, according to the Office for National Statistics. If your organisation employs or is thinking about employing an individual from the gig economy, be sure to correctly classify their employment status in order to avoid fines, penalties, higher insurance costs and potentially invalidated cover.
The UK gig economy makes up an estimated 15% of the nation’s workforce, according to the Office for National Statistics. Your organisation may even employ some members of this group if you have volunteers, seasonal employees, contractors and other kinds of non-traditional staff members. Just as you do for your full-time employees, you have a legal obligation to provide these individuals with a safe working environment and employment rights. However, even though some gig economy members may be independent workers, your organisation should not label them as self-employed. If you do, that could void their employment rights. To ensure all UK employees are protected, the government requires most businesses, with few exceptions, to have a thorough employers’ liability insurance policy.
A comprehensive and effective employers’ liability policy should provide cover for the following types of employees:
- All permanent employees
- Contract, casual and seasonal employees
- Abroad employees that spend at least 14 days continuously in Great Britain or more than seven continuous days on an offshore installation
- Labour-only subcontractors
- Temporary staff—including students and people on work placements
- Volunteers, advisors, referees and marshals
The HSE enforces this rule and can fine your organisation up to £2,500 every day if you do not have the appropriate level of insurance. In general, organisations are required to have at least £5 million of employers’ liability cover, yet depending on your organisation’s particular risks and liabilities, you may choose to increase the amount of cover. If your organisation does not comply, you could receive fines, penalties and your cover may even be invalidated.
For more guidance about employers’ liability insurance, contact Lockyers today.