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Employers Liability for Property Owners and Renovators

If you are a property owner who is renovating a property it is possible that you might need to buy employers liability insurance for the project – it depends on your level of involvement and who is employing the contractors, who pays the bills and who gives direction on the site on a day to day basis as the work is being undertaken. The following guidelines may be helpful. JCT Insurance Expert can provide employers liability cover to project managers and property owners for the renovation work. Please click here for a proposal form

Project Management

In this situation the property owner or renovator is project managing where they are responsible for the day to day running of the site including all, or a combination of the following:

  • CDM regulations (probably not applicable on a domestic renovation)
  • Health and Safety on site
  • Direction of contractors and labour
  • Employment of sub-contractors

Property Owners Liability Only Required

Where the renovator is not involved in project management, but rather simply sits back and pays the bills. The renovator is still entitled to give direction as to specification (ie, I want those bricks and I want this colour), but not to instruct contractors how to do the works. The renovator hands control of the site to a main contractor, or to a professional project manager.

Property Owners Liability & Full Project Public Liability

Where the renovator is undertaking any or all of the above bullet points, either in isolation, or in conjunction with a professional project manager, contractor or architect

Property Owners Liability, Full Project Public Liability & Employers Liability

Where the renovator is project managing and, in addition, directly employing labour/contractors who do not hold their own liability insurance. This is a bit of a grey area. The debate centres around whether or not the contract is one of service or employment. Insurers advice is that, as long as the person employed holds PL insurance of his own, then the contract is one of service rather than employment and no EL cover is required. Where EL insurance would be sensible is where persons are engaged who hold no liability insurance of their own. So, for example, if the renovator employs a sole trader to do the electrics, and that trader has a PL policy to cover his activities as a sparky, then EL is not required for that person. If, however, the renovator employs an individual who is known to be a bit handy with circuitry, but does not hold any liability insurance at all (perhaps because this is not his main job), then there is a much stronger argument that this person is an employee and EL insurance would be sensible.

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