Do we need Employer’s Liability Insurance

[AngelsOnAPinhead]

We are a non-profit making limited company managing the maintenance of a small block of flats. The company consists of all the flat owners. We don’t employ people in the sense of paying national insurance. We do, however, use contractors to do the maintenance. If a contractor were to sustain an injury they thought was our fault, would public liability insurance cover us for legal fees and possible damages?
Thanks

I believe so, yes.

You need to speak to your insurance broker to ensure you understand the extent to which your PL policy will cover you. Don’t rely on a forum for policy coverage advice.

And if people do work for your company, regardless of whether they're paid, r contractors, they're still considered 'employees'. Eg you'd have to have employers liability insurance even if you have a 16 y/o in for a week's work experience just making the tea. That's what I have been advised.

If it's a limited company and there's more than one director I believe tjat also required ELI but as a pp said, circumstances can vary even though things might look similar - a decent broker will be able to advise.

I’ve messed this up because the title is the opposite of the text. You mean we do need Employer’s liability insurance, don’t you.
Thanks

Yes, you have clarified. Thanks Candy

Yes you do but double check to be sure!

Yes, it's often part of insurance policies for blocks of flats - check that

I'm afraid some of CandyLeBonBon's advice is incorrect. Consult your insurance broker.

You need to check with your policy provider.

Make sure that you have a way to check that the contractor has valid insurance in place for the duration of the job.

Plus you should check that you have directors and officers policy too.

Thanks All

I’m sure you’ll need public liability cover, if nothing else then for any communal space or areas the public have access to. In my non expert opinion, if it’s set up as a management company with directors, you should also have a Directors and Officers policy. If no one is actually employed, you shouldn’t need an employers liability policy. That’s how the management co of a flat I own is set up anyway.

That’s interesting @Tryingtokeepgoing. That’s exactly what we’ve got. I got as far as the definition of ‘employee’ and started to worry. Perhaps the Directors and Officers Policy is the place to start.

It sounds as though you don't employ the contractors so you don't need employers liability for them. I assume they bill you for each job in the same sense that if I asked a plumber to come and do a job at my house, they would give me a bill to pay. Neither circumstance are they employed or require us to have employers liability insurance.

If said contractor injures themselves and is deemed to be the fault of your management company then the Public Liability the management company has should cover this.

On a side note, the management company is Ltd so each flat owner that makes up the Ltd company would be considered an employee. Employers Liability is a legal requirement so it seems you will need to have this cover regardless.

I don’t think that right…the owners of the management company are shareholders, and possibly directors, but not employees.

@Tryingtokeepgoing This feels like too much of a grey area to say they are definitely NOT employees in the eye of the law. The employers' liability act says: "For the purposes of this Act the term “employee” means an individual who has entered into or works under a contract of service or apprenticeship with an employer whether by way of manual labour, clerical work or otherwise, whether such contract is expressed or implied, oral or in writing."

However this is interpreted will decide whether the shareholders/directors are "employees" and thus whether employers liability insurance is required. I think if I was involved in a company like this, I would not take the chance of breaking the law and either seek legal advice or just take out the insurance to be safe.

@Debbie756x
I’m surprised you can be so categorical that contractors providing services aren’t employees but directors are.
Anyway, thanks for your interest everyone.

I wouldn’t make it too complicated - it’s not a grey area at all, if you know anything about it. I assume you sell employers liability insurance ;)

It’s clear that no one involved “…has entered into or works under a contract or apprenticeship…” simply by virtue of being a shareholder. To imply otherwise is wrong.

The leaseholders are shareholders. That doesn’t make them employees
The shareholders have appointed directors - perhaps all of the shareholders are directors. We don’t know.
The directors would be well advised to ensure they have D&O (Directors and Officers) cover.
The directors engage contractors, who are not employees as the OP has explained, to carry out certain works.

Contractors are not employees, and are covered by the management company Public Liability and D&O cover in the event they do have a claim against the company.
The directors should ensure that the contractors also have the necessary liability insurance so that in the event that they are negligent the management company can recover against them.

What risk do you think that employers liability is covering, and have you tried getting a quote for it when you have no employees and no Employee Reference Number from HMRC?

Independent contractors such as those engaged to do emergency plumbing, replace windows or do landscape gardening for a block of flats are not going to be employees of the property management company. They are businesses in their own right.

Some people don't seem to understand what a contractor is.

But it doesn’t matter what a contractor is. It only matters what an ‘employed person’ is.

I’m going to hide this thread now.
Thanks, all.