J001010 - Lycetts Newsletter Jan 2024 LR - Flipbook - Page 7
W HO IS L I A BL E
W H E N... ?
Dorothy Pigg
Associate Director,
Newcastle
When employing contractors, be it on a farm
or estate, or to carry out work in your home, it
is vital to ensure you know who has what
liability cover, what the indemnity limits and
expiry dates on policies are, and any terms and
conditions that may apply.
as an employee and legally must be covered under
an employers’ liability insurance policy, but only
provided their employer has declared any payments
to them as these are regarded as wages.
For business the first thing to establish is who is
employing who and hence who is the employer.
There are two main types of insurance required by
an employer. The first is employers’ liability which is
legally required. Employers’ liability is designed to
cover costs arising from any claim made by an
employee against your business if injured or worse
during the course of their employment.
A high-profile case brought by carpenter Andrew
Sully highlights the potential pitfalls of taking on
your own project management. Mr Sully suffered
severe spinal injuries following a fall through a roof
skylight at the home of businessman Mr Hines and
his wife. In the resulting £10 million claim, Mr
Sulley’s legal team said proper safety measures had
not been in place when he was asked to lay some
roof felting at the couple’s home as part of a build
being project managed by Mr Hines. Mr and Mrs
Hines are disputing liability after their insurer
refused to cover the claim.
The second is public liability which protects you
against claims for damage to third party property,
or the injury, or death of a third party caused during
the course of your business activities.
While most contractors will have their own cover,
complications can arise over who has responsibility
for sub-contractors.
There are two types of sub-contractor in insurance
terms. The bona fide sub-contractor is someone
who works under their own direction and supplies
all their own tools and materials. They will generally
provide a quote for the required work and invoice
once completed. A bona fide sub-contractor should
have their own insurance, but it is the responsibility
of the business owner or private individual
contracting them to undertake the work to check
that the correct insurance arrangements are in
place.
The second type is the labour only sub-contractor.
They supply only their labour and work under the
direction of their employer. They are paid by the
hour/day/week and in insurance terms are regarded
There are, however, several grey areas where
employers can get caught out in the event of a
claim. One is where a home renovation project is
being self-managed.
When undertaking such projects it is important
to know exactly what is and is not covered by
your own insurance policies, and to make sure
your broker is aware of the nature of the work
and how you plan to carry it out. They can then
advise on any health and safety requirements,
risk assessments and additional cover that
might be required.
Agriculture has the worst rate of fatal injury to
workers of the main industry sectors according to
Health and Safety Executive (HSE) statistics, with
the annual average injury rate over the last five
years around 21 times as high as the all-industry
rate. Accidents result from falls from height, faulty
machinery, slipping, animals and many more. Most
farms and estates use numerous contractors for a
wide variety of jobs, and many disputed claims arise
from failure to check if both they themselves and
their contractors have the correct level and type of
insurance cover for the job.
07
