Over 50,000 sole traders may be at risk of fines by failing to comply with legislation requiring employers’ liability insurance for seasonal and part-time staff, a study has revealed.
Research from MORE TH>N Business has found that nearly three quarters of sole traders admit they are unaware of changes in employers’ liability legislation.
More than a fifth of respondents admitted that they do not understand what employers’ liability insurance covers.
Without this cover, traders’ businesses are exposed to possible fines of up to £2,500 per day under the amended legislation and are liable for compensation and legal fees if an employee is injured or becomes ill at work.
Even a claim for relatively minor injuries can cost £5,000, including legal costs, MORE TH>N Business said. Collectively, fines could cost sole traders up to £125m per day.
As a result of last years change in legislation, sole traders that employ seasonal, part-time staff or even unpaid volunteers must take out employers’ liability insurance as a legal requirement.
“I have been running my own business as a sole trader now since 1976, and I was completely unaware that should I ever need to take on part-time help I would need employers’ liability insurance or be liable for these fines,” said Chris Foss, a sole trader from Shoreham, West Sussex.
MORE TH>N Business estimates that 17% of sole traders currently employ seasonal or part-time staff without adequate cover.
