Many farming businesses no longer employ labour directly; they may utilise self-employed labour, unpaid family members, labour-only contractors or agency employees.
In each of these circumstances it is still vitally important that the farming business maintains Employers’ Liability insurance.
Employers’ Liability insurance is a legal requirement for any business that is using labour. The cover provides legal liability for injury or illness caused to anyone working on the farm. The normal indemnity limit in farming is £10,000,000 for any one claim. Together with Public & Products Liability insurance it is the most vital insurance cover on the farm.
The most common problem we see on farms today is where the farmer believes that because he uses self-employed labour Employers’ Liability cover is not required. This is categorically not the case; if that self-employed labour is utilising your premises, tools and machinery and is under your direction, in the eyes of the law they will be seen as an employee. Their tax status is totally irrelevant. The same situation arises if you have a family member, friend or neighbour helping you out for a day and no payment is made to them; in the eyes of the law they will be classed as an employee and you will need to have Employers’ Liability insurance to cover them.
If someone is seriously injured at work, the compensation claim and resultant legal fees can run into hundreds of thousands, and occasionally millions, of pounds, so it is crucial that Employers’ Liability insurance is not overlooked.
Premiums for Employers’ Liability cover will vary between insurers but will generally start from £100 per annum and increase with the amount of wages you pay out.
Good health and safety management on the farm will help keep premiums down as this should be reflected in fewer accidents.
Our advice has always been that even where you employ no direct labour it is always worth keeping the cover in place.
Case Study A recent claim we dealt with involved a self-employed builder who had quoted for and accepted a job to convert a redundant farm building into an office. The builder would occasionally borrow a tractor and trailer from the farmer for removing debris and unloading materials on site. One of the farm staff had also assisted the builder from time to time. Before the job was finished the builder sustained a back injury which caused him to be off work for approximately one year. The builder sued the farmer as his employer; insurers went to court to defend the farmer but lost the case as the Judge felt an employer/employee relationship existed due to the farmer providing occasional labour, tools and machinery. The court award to the builder was in the region of £100,000. Luckily the farmer had Employers’ Liability insurance that paid the court award plus all of the legal costs involved.
Never risk not having Employers’ Liability insurance.