Employers’ Liability Insurance for Scaffolders

The legal requirement

The Employers’ Liability (Compulsory Insurance) Act 1969 requires employers in Great Britain to hold employers’ liability insurance (EL) with an authorised insurer for at least £5 million per occurrence. Almost every policy on the market is written at £10 million, because the extra cost is small and main contractors generally specify £10m in their subcontract terms.

You must display the certificate where employees can see it, or make it available electronically. The HSE enforces the Act, and the courts can impose a fine of up to £2,500 for each day an employer is without cover, plus up to £1,000 for failing to produce the certificate when asked.

The exemptions are limited. A sole trader with no employees does not need EL, and a limited company whose only employee owns at least 50% of the shares is exempt. If you work on your own, the sole trader guide explains what cover is relevant instead.

What the policy covers

EL pays compensation and legal costs where an employee is injured, becomes ill or dies as a result of their work and you are found liable. For a scaffolding firm the obvious exposures are falls during erection and dismantling and injuries from falling material. Manual handling injuries from boards and tubes, hand-arm vibration from powered tools and noise-induced hearing loss also produce claims, and some of these arrive many years after the exposure.

EL is written on a losses-occurring basis, meaning the policy in force when the injury or exposure happened is the one that responds, however long afterwards the claim is made. There is no longer a statutory duty to keep old certificates, but the HSE strongly recommends keeping them indefinitely, and the Employers’ Liability Tracing Office exists partly because so many firms do not.

Who counts as an employee

For the purposes of the Act, the question is whether someone works under a contract of service or apprenticeship, and the courts look at the real working relationship rather than the label on the paperwork. In a scaffolding business the following are normally employees for EL purposes:

• Labour-only subcontractors: scaffolders you pay by the day or week, who work under your supervision, with your materials, on your contracts. Their CIS or self-employed tax status does not change this.
• Apprentices and trainees, including those holding CISRS trainee cards.
• Family members who work for you, unless the business is unincorporated and they are close relatives, which is a narrow exemption worth checking with your broker.
• Work experience students, who are treated as employees for health and safety purposes.

Agency labour is usually employed by the agency, which holds the EL, although you still owe them a duty of care on site and your public liability should extend to injury to them. Bona fide subcontractors, who bring their own gang and materials and work to their own methods, are not your employees, but you should hold copies of their insurance certificates.

The wage roll you declare at renewal needs to include all payments to the people in the first list. Under-declaring to reduce the premium leaves the policy open to being reduced at claim stage.

Why the premium is higher than for other trades

Falls from height are the largest single cause of fatal injury in UK construction, and scaffolders are exposed to them daily. Insurers rate EL for the trade on wage roll, maximum working height, claims history and, increasingly, on evidence that the firm works to SG4:22 with collective fall protection rather than relying on harnesses.

Factors that help the rating include a stable, carded workforce, documented toolbox talks, a written SG4 compliance statement, a clean five-year claims history, and membership of a trade body such as NASC or the Scaffolding Association, both of which audit members’ safety systems. The cost guide goes through these in more detail.

Prosecutions and legal expenses

EL compensates the injured person. It does not pay fines if the HSE prosecutes under the Health and Safety at Work etc. Act 1974 or the Work at Height Regulations, and fines for serious fall-from-height offences are now frequently six figures. Most scaffolding packages therefore include legal expenses cover with a health and safety defence section, which pays for legal representation during an investigation and prosecution. Check whether corporate manslaughter defence costs are included, and note that the HSE’s Fee for Intervention charges are a regulatory cost rather than a defence cost and are usually not covered.

When an employee is injured

Report the accident under RIDDOR if it meets the reporting criteria; a fall from height causing a specified injury or more than seven days’ absence does. Notify your insurer promptly, keep the scaffold and the scene undisturbed as far as is safe, and gather the documents: risk assessment and method statement, the SG4 arrangements for the task, the operative’s CISRS card and training record, inspection records and witness statements. Do not admit liability or make any offer of payment, since the policy requires the insurer to handle that.

Liability in EL claims is often conceded, so the argument is usually about the value of the claim, which depends on the severity of the injury and any contributory negligence. Your records are what allow the insurer to argue contributory negligence where it applies, and to show that the firm’s systems were sound.

Employers’ liability FAQs for scaffolders