Motor Trade Insurance
Employers Liability Insurance
When does Employers Liability become compulsory for a motor trade business ?
The Employers’ Liability (Compulsory Insurance) Act 1969 was introduced as legislation to ensure that you have at least a minimum level of insurance cover against any such claims. The legal minimum you should be insured for is £5,000,000 although all motor trade insurers give £10,000,000 limit of indemnity as standard.
Examples of companies that are exempt from the act include (For a full listing, please refer to the updated Act 1998) :-
- Sole Traders or Partnerships were there are no employee’s other than the working principals/partners are involved in the business.
- Most public organisation such as government, local authorities etc.
- Health organisations such as NHS etc.
- Family businesses, ie if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies.
- Those business’ incorporated as limited companies must have compulsory Employers Liability insurance unless that company only employs their owner & that employee also owns 50% or more of the share capital in the company.
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