There are two main reasons why you should take out employers’ liability insurance: firstly, to avoid your vineyard being hit financially by a substantial claim for compensation by an employee being injured or killed at work.
Secondly, you’re almost certainly obliged by law to take out a policy. Businesses without at least £5m of cover face a daily penalty of up to £2,500. If your vineyard isn’t a limited company and it only employs close family members, you may be exempt, but it’s still a good idea to protect yourself, because even family members seek compensation for injuries.
There are lots of negative stereotypes about personal injury claims, so you may be thinking that none of your employees fit the image of the money-grasping claimant so popular in the press. Think again: even if you only employ close family members in a low-risk industry, you still need insurance.
No business is risk-free and if someone is seriously injured then the claim for compensation, care and medical treatment can run into millions of pounds. In addition, you could be facing substantial legal costs for both the claim and your defence.
It’s clear that you need employers’ liability insurance to cover your legal liability towards people who work for you, but how do you define this category? Let’s look more closely at who is covered by this type of insurance.
Employees form the most obvious group of people. Unsurprisingly, employers’ liability insurance provides cover for those employed by your business.
If you hire subcontractors who will work under your direction using your tools and equipment, they probably need to be covered by an employers’ liability insurance policy. If you hire a subcontractor who comes and goes as they wish and uses their own tools, you won’t usually require employers’ liability cover for them.
If a contractor works solely for you, it’s likely that you need to take out employers’ liability insurance to cover them. If they work for lots of different companies, it’s less likely that you’ll need insurance. Seek specialist advice if necessary, as this can be a complex area.
If you don’t have any employees and work by yourself, you won’t need employers’ liability insurance. If you hire people to help, even on a temporary or seasonal basis, for example grape pickers, you’ll need to take out insurance.
Usually a limited company is required by law to take out an employers’ liability policy. However, if you contract through a limited company of which you are the director, own at least 50% of shares and have no employees other than yourself, you aren’t legally obliged to take out insurance.
Even if you only employ one person, you’ll still need to take out a policy. If you’re uncertain whether someone who works with you is an employee or a subcontractor, it’s best to take some legal advice, as lack of clarity could lead to a host of problems in addition to your insurance liability.
Purchasing employers’ liability insurance
Most insurance policies provide the option to include employers’ liability insurance automatically and this section of cover is rated on wage roll and number and type of staff.
As with most insurance policies, the policyholder is usually required by the insurance provider to take reasonable steps to avoid injury to employees. You’ll be expected to comply with health and safety laws that apply to the vineyard industry. Having an insurance policy doesn’t reduce your duty of care to your employees.