Work Experience, Trainees & 2nd Shooters. What insurance do I need?
We all hope to get "big" enough to be able to take on staff - after all it
is a sign of success with our businesses but is it really as straight
forward as advertising for a position, interviewing the candidates and then
offering the job? We still need to be mindful of the law and what this can
entail. This article is offered as a suggestion of potential insurance pit
falls to watch out for - you should always take professional advice first to
ensure you stay within the law.Work Experience
As soon as you start advertising yourself as a professional photographer
then the chance is the calls will start coming in - usually from schools and
colleges asking if you will take work experience placements.
Put simply, if you decide to offer this opportunity you will need to make
sure you have Employers Liability Insurance. The school or college WILL ask
for a copy of the certificate and if it isn't on your current insurance
policy then the chance is you will be need to add it on. Prices can range
from £40 for a short term "add on" (if offered) up to about £100 a year. The
school or college is unlikely to contribute this towards your costs so it is
something to bear in mind when you say yes!
Be warned - doing a favour for a friend doesn't mean that you can get away
without this. If your mate asks you to take his son / daughter on you STILL
need this cover to ensure you don't break any laws.
Trainees
In much the same way as above, a Trainee is a more long term placement with
you and you will need the Employers Liability cover to protect YOU. The only
real difference between a trainee and work experience, is that the work
experience person is likely to be with you for a couple of weeks before
returning to school / college whereas the trainee is a member of staff and
is entitled to the same protections under the law as any other member of
staff is.
Some insurance companies will not extend your Public Liability cover or
Professional Indemnity cover unless you have the Employers Liability cover
to protect yourself. Remember, an insurance provider is unlikely to want to
assist you in breaking the law!
2nd Shooters
This is where the law can get fuzzy. Is your 2nd shooter a professional
photographer who holds their own insurance? A neighbour or friend who knows
their way around a camera? A trainee?
Firstly, if you have asked a friend to be a 2nd shooter at a job you are
undertaking and they are a professional photographer do they have their own
insurance? If they do, and their insurance is equal in cover* to yours (
Public Liability and Professional Indemnity if required) and you have
exchanged emails asking them to assist you in the job - then it is likely
they could be classed as a bona-fide sub-contractor. The exchange of emails
could count as a contract and the fact their insured and normally work
elsewhere is potentially evidence of them being a sub-contractor for you.
This could mean you would NOT need Employers Liability insurance. In the
worst case scenario, if anything was to go wrong, then they have their own
insurance to cover themselves and if they "muck up" a job for you your
insurance can subrogate or claim from them.
If your 2nd shooter does not hold insurance, or their insurance cover is
less than yours then they are an employee in the eyes of the law.
Do I really need it?
If you are a husband and wife team, or your sons/daughters assist then you
generally do not need EL cover. If you're in doubt, then usually a good way
round it is to insure them jointly with you - that way all the cover applies
to them as well as you. The exception to this is if you are a Limited
Company with 2 or more working directors then you MUST by law have this
cover even if you are a husband and wife team under the Employers Liability
(Compulsory Insurance) Act 1969. There is an exception to this legal
requirement which is a Limited Company with only ONE working person who is a
director and owns fifty per cent or more of the issued share capital, i.e.
there are no other persons whatsoever doing any work in the company.
It is also usual for Employers Liability to be required if you have work
experience students or volunteers assisting you even if there is no payment.
Don't be fooled - you may only have a "friend" assist you, who is not
getting any payment but if something happens to them, even if they don't try
and sue you, the HSE may take up the matter or indeed the Police may decide
to prosecute for negligence. Remember, EL is dealt with under criminal law -
the same as murder, assault and arson!
What is the definition of an employee?
This is the million pound question and where the regulations get confusing,
for example, someone that assists you to whom you pay a "day rate" would be
classified as an employee even though you are not responsible for their tax
and national insurance contributions!
You are responsible for the health and safety of your employees while they
are at work. Your employees may be injured at work, or they or your former
employees may become ill as a result of their work while in your employment.
They might try to claim compensation from you if they believe you are
responsible. The Employers' Liability (Compulsory Insurance) Act 1969
ensures that you have at least a minimum level of insurance cover against
any such claims.
In general, you may need employers' liability insurance for someone who
works for you if:
- You deduct national insurance and income tax from the money you pay them;
- You have the right to control where and when they work and how they do it;
- You supply most materials and equipment;
- You have a right to any profit your workers make although you may choose to share this with them through commission, performance pay or shares in the company. Similarly, you will be responsible for any losses;
- You require that person only to deliver the service and they cannot employ a substitute if they are unable to do the work;
- They are treated in the same way as other employees, for example, if they do the same work under the same conditions as someone you employ.
In general, you may not need employers' liability insurance for people who work with you if:
- They do not work exclusively for you (for example, if they operate as an independent contractor);
- They supply most of the equipment and materials they need to do the job;
- They are clearly in business for personal benefit;
- They can employ a substitute when they are unable to do the work themselves;
- You do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers' liability insurance to cover them.
These are only guidelines - you have to decide yourself if your situation
would fall into either of these categories although my advice would always
be err on the side of caution if in doubt!
What could happen if I need it and don't have it?
If you don't have EL cover and you should have then you could be taken to
court and prosecuted - the maximum penalty being 14 years in jail and an
unlimited fine although this would usually be as a result of an accident to
someone who was assisting you. However, you could face a large fine and be
disqualified from running a company just for having incorrect insurance. For
that extra premium it really isn't worth it?
If you are ever in doubt then please make sure you take proper advice
*Equal in cover means that if you hold £2m Public Liability then they MUST
hold at least the same £2million cover. If there cover is only £1million
then they cannot be a sub-contractor.
Call us on 020 3633 2280 for more advice or if you have a specific question.
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