|
Minister for Work Jane Kennedy said: "Hundreds of thousands of limited companies, where the owner is the sole employee, will benefit from the new rules. Removing the requirement to purchase ELCI could save companies hundreds of pounds each year."
It is estimated there are around 300,000 small companies that will be able to take advantage of the rule change, which was made following a wide-ranging consultation on whether to remove the requirement. The change was announced in October last year.
Ms Kennedy said: "From Monday, many small businesses whose owners have told us they cannot afford to buy this compulsory insurance will no longer need to purchase it. This is good for businesses across the country."
The Association of British Insurers estimates that the average saving for each company might amount to around £250 a year.
Ms Kennedy added that last year's consultation had given everyone the chance to have their say on the insurance, with the Government listening to their views.
She said: "The consultation sought the views of employers, insurers and their representative bodies and other stakeholders on the proposal, with nearly 80 per cent of respondents agreeing the requirement should be dropped.
"This change will bring small companies who have a single employee who owns the company into line with similar unincorporated businesses."
Suing yourself?
Paul Thorpe of Coulson Pritchard, who provides PI insurance to members of the Shout99 network, said: "While this doesn't impact too much on our clients, for some trades and professions who can pay up to a £1000 for the cover, it will be welcomed.
"It's good news in general that the requirement has been removed, as it was in some respects a totally superfluous piece of cover.
"As an owner/sole employee how could you sue 'yourself', for example, for contracting Repetitive Strain Injury (RSI) when you had laid down your own working conditions and practices?"
Background
The Department for Work and Pensions undertook to review the ELCI regulations for limited companies employing only their owner through a Partial Regulatory Impact Assessment between March and June last year.
A summary of responses to the consultation is available on the DWP website here
With some exceptions, the Employers' Liability (Compulsory Insurance) Act 1969 requires employers carrying on business in the United Kingdom to insure their liability to their employees for personal injury sustained in the course of their employment in Great Britain. There is currently a penalty of up to £2,500 for failure to insure on any day.
The legislation provides that an owner/sole employee is not required to purchase ELCI if the business remains unincorporated. However the incorporation of a business creates a separate legal person, the company, who acts as the employer and a requirement to purchase ELCI.
The Department published its second stage and final report of the review of ELCI on 4 December 2003. In the report the Department undertook to review the ELCI regulations relating to 300,000 of the smallest limited companies where the owner is the sole employee to exempt these from employers' liability.
--
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
-
Susie Hughes © Shout99.com 2005
|
