Page 8 - ALG Issue 3 2014
P. 8
Legal
Thinking about Insurance
By Liz Bunting Legal and Operations Manager
This article will outline some of the legalities that associations should consider.
Insurance products are an important method of managing risks and should always be considered as part of a governing body’s review of risk control generally. Insurance policies are not standard and the names of insurance products are not used consistently, therefore, two identically titled policies may offer significantly different cover. It is important to obtain insurance which is appropriate to the Associations needs.
Insurance should be reviewed on an annual basis by the governing body; it should be an agenda item, with a full written report. This should include details of the risks covered under each policy, the level of cover, exceptions to the policy, any excess payable when
a claim is made and the cost of the policy. Also any potential developments in organisational activities, premises or equipment must be considered as this could require increased or extended levels of cover. This kind of review provides an opportunity for the governing body to confirm that full disclosure has
extremely unwise not
to have some form
of PLI. This type of insurance may also be
a condition of a Lease
to the Association. Any organisations providing services under contract will usually be required to have Public Liability Insurance.
The above insurance
covers claims made against
an Association (or committee
members of an unincorporated body)
for death, illness, injury, or loss of or damage caused to property as a result of the negligence of the Association. This
been made to the insurer. The governing body should also ensure the following:
• That the organisation is identifying and managing
the risk appropriately.
• That the organisation complies with all legal
requirements, which could affect the insurance, for
example health and safety obligations.
• That clear responsibility should be allocated for
dealing with fire, theft or violence and ensure policies are in place to minimise the risks to people and property.
• That all copies of insurance policies and other key documents are kept off the premises.
Public Liability Insurance (PLI) is not compulsory; however, if you run premises and / or provide activities or services, it would be
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will include injury suffered by someone using the Association’s premises as a result of a breach of duties under the Health and Safety at Work Act 1974 or the Occupiers Liability Act 1957.
Generally, it includes users/beneficiaries,
visitors to the Association’s premises, may include trespassers, passers-by and anyone other than employees who come into contact with the Association. It does not cover injury or damage
or loss caused by the provision of professional services or relating to issues where goods are supplied. This is generally covered by Product Liability Insurance, which is normally available as an
8
Every employer has a statutory duty to insure all staff
extension to PLI. Where volunteers and members of the governing body are not specifically included in PLI, it may be wise to take out Employers’ Liability Insurance.
Every employer has a statutory duty to insure all staff and may
be fined up to £2500 for each day that it does not have Employers’ Liability Insurance (ELI). The insurance must cover the Association (or in unincorporated Associations, the members of the governing body or others considered for legal purposes to be the employer)
for claims up to £5million. This should be for each incident leading
to injury, illness or death arising out of or in the course of the employee’s work, where an employer was in breach of statutory
duty to the employee and can be shown to have been negligent. Usually, there is no obligation to take out ELI for volunteers;
however, it is good practice to do so because a court could in some circumstances deem them to be employees for these purposes.
It is not a matter of whether PAYE is paid, or the volunteer is given payment; it will be assessed by ‘how much control there is, over the way in which the duties were performed’. This aspect would be open to a Court’s interpretation.
Employers’ Liability Insurance does not cover situations where
the employer has shown the required standard of care; it also only covers the person, not property, other objects, or clothing.
