When the fine for not being insured was almost certainly more than the cost of being insured
What happened?
The owner of a recycling company, who employs three people, displayed an Employers’ Liability Compulsory Insurance certificate at his factory. He was not, however, paying the insurance premiums. His insurance broker had written to him on several occasions to extend the deadline for payment, and then wrote a final letter stating that the policy was cancelled and requesting he returned the certificate.
The owner continued to operate without insurance for nearly two months, which was when one of his employees contacted the HSE to raise their concerns, and they then investigated.
Legal Outcome
The owner appeared at Magistrates’ Court and pleaded guilty to breaching s2(1) of the Employers’ Liability (Compulsory Insurance) Act 1969, and was fined £2500 with costs of £1000.
The HSE inspector who investigated the case stressed that it’s vital that companies are in possession of a valid insurance certificate. She said: ‘Employers are responsible for the health and safety of their staff while they are at work, and must protect them with compulsory insurance.’
What can we learn from what happened?
A very short case study to act as a reminder of employer’s legal responsibility to have Employers’ Liability Insurance, and recognition that the HSE will prosecute for failure to comply. The repeated opportunities for the owner to comply will not have helped his case, and the reporting of their concern by the employee, anonymous or not, is not uncommon in these types of cases.
And also an opportunity to clarify that while Employers’ Liability Insurance is a legal requirement, Public Liability Insurance is not, and organisations have the option to ‘self-insure’.
Source of Information
SHP In-Court