This clause requires you (or your company) to carry insurance that covers injuries or illnesses your employees suffer at work. The clause specifies a minimum amount you must be insured for—for example, £10 million in the UK. This matters because if an employee is hurt and sues you, this insurance pays their claim instead of bankrupting your business. Without this clause, a contract partner could walk away if you cause employee harm, and you'd face both a lawsuit AND a broken contract.
Check what your current employer liability insurance actually covers before signing. If the required amount (say £10 million) is much higher than what you have, get a quote to increase it—this is usually cheap. If the amount seems unreasonably high for your business size, negotiate it down in writing rather than just hoping the other party won't enforce it. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires you (or your company) to carry insurance that covers injuries or illnesses your employees suffer at work.
Why should I care about this clause?
The clause specifies a minimum amount you must be insured for—for example, £10 million in the UK.
What are my options?
This matters because if an employee is hurt and sues you, this insurance pays their claim instead of bankrupting your business.
How does this affect small businesses?
Without this clause, a contract partner could walk away if you cause employee harm, and you'd face both a lawsuit AND a broken contract.