Employee liability insurance (known as employers liability insurance) has been a legal requirement in the UK since 1969, this means that if you have any employees at all or any labour only sub-contractors you must have suitable employer's liability insurance in place...
If you do not provide proof of employee liability insurance on request you will become liable for a large fine and possible imprisonment, not only this but if your employee does make a claim against you then you may be liable for substantial legal expenses and compensation costs which could ruin you and your business...
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