Manchester company fined over employer liability insurance

A Manchester linen manufacturer has been fined for failing to provide Employers Liability (Compulsory) Insurance (ELCI).

Following the receipt of an anonymous complaint in April 2017, an inspection was conducted at the site by the Health and Safety Executive (HSE). Manchester and Salford Magistrates Court heard that during the inspection it became clear that T & W Linen Co Ltd did not have Employers Liability (Compulsory) Insurance. T & W Linen Co Ltd of Denton Road, Manchester pleaded guilty to breaching Section 1(1) of the Employers Liability (Compulsory) Insurance Act 1969 and was fined £2,500 and ordered to pay costs of £429.89. 

Speaking after the hearing HSE Inspector Jennifer French said:

“Every employer needs to ensure that they have Employers Liability (Compulsory) Insurance is in place to insure against liability for injury or disease to their employees arising out of their employment. Where employers are found to be in breach of this requirement, they will be held to account by HSE.”

Phoenix comments:

In April 2015, the Actuary (magazine for the Institute & Faculty of Actuaries) published an article about a survey conducted by insurance provider Aviva who reported one in 10 SMEs think employers’ liability insurance not legally required. The survey of 1,507 SMEs from Aviva found a quarter of SMEs wrongly believe this is only legally required if a business has more than one employee. Using figures from Health and Safety Executive, Aviva said employers without the insurance carried the “risk of fines of £2,500 for every day the business is not properly insured”. The study also reported that SMEs were unsure of all other types of business insurance. A third (29%) were confident they had the right cover, but 12% admitted they had no business insurance at all. Aviva found firms’ priorities for insurance differed according to their length of time in business. While a quarter of SMEs operating for less than a year had no insurance, only 5% of more established businesses (operating for 8-10 years) had none.

Angus Eaton, managing director of commercial lines at Aviva, said:

“Clearly SMEs need a strong understanding of their legal obligations and how they can protect their business and employees to keep it trading. One claim without adequate cover could easily be enough to put severe financial pressure on an organisation or even close it down completely.”

Employers’ liability insurance protects employers from liabilities such as staff illness or injury at work. Further information about the Employers’ Liability (Compulsory Insurance) Act 1969 can be found on the HSE website: http://www.hse.gov.uk/pubns/hse40.pdf