Employers Liability Insurance

If you use Labour Only Sub-Contractors (LOSC) they are regarded as direct employees as they are under your control.

You give instructions and they generally provide labour only. They are usually paid an hourly or daily rate. Insurers charge a premium for LOSC’s.

There is a different type of sub-contractor, which are not charged for under the Employers’ Liability section. These are Bona-Fide Sub-Contractors (BFSC).

To ensure you are paying the correct premium, you need to separate the two types. Otherwise, you may be paying too high a premium if you include all sub-contractors as labour only.

Pearson Insurance Services will help you to classify your sub-contractors correctly to ensure you are adequately covered and not paying more than necessary for your liability insurances.

A BFSC is usually a business in its own right, often providing materials in addition to those you provide. They hire their own plant, have their own employees and insurance and will invoice you for payment, generally on a pre-agreed contract price.

BSFC’s will be rated under the Public Liability section of your policy.

Be aware of an Endorsement Condition on your policy schedule, requiring Bona Fide Sub-Contractors to have the same amount of Public Liability cover as your policy. If your policy has £5m indemnity limit but your BFSC has only £2m, the contingency cover under your policy will be compromised.

We hope these points have helped you to form your opinion of us and our service level. We would love the chance to help you with your next insurance requirement.

Many thanks for your time…speak soon.

Sandra Bev and Phil Sigs - Pearson Insurance Services

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