Why is the Employers Liability Insurance Essential for any Business?
Posted: Nov 02, 2017
Lawfully, the employers are liable for the well being and security of their employees while they are at work. If anything were to happen to the wellness of the employees owing to the business operations, it could lead back to the company and the employees could sue or demand a compensation for their losses. There is no way around this and the companies in question always end up paying for the damages. To safeguard the companies from unjust claims, employer’s liability insurance covers the cost of the damages by compensating the employees affected.
Although legally required for every company to buy the employer's liability insurance, some companies prefer to skip it in the hopes they would never need it. This approach is very incorrect and could prove to be destructive for your company. Here are some reasons why not buying an employers liability insurance from an insurance broker in NZ can be fatal to your company.
It could land you in a legal trouble.
Since employer’s liability insurance in NZ is legally obligated; the companies who don’t get insured run the risk of facing legal outcomes. If caught operating without valid employers liability insurance, these companies can be fined thousands of dollars which could be detrimental for the growth and expansion of the company.
The only exemptions are non-incorporated and family-owned businesses. Even then, it is advisable for companies with that nature to buy insurance from insurance brokers in Auckland.
It could break your bank and perhaps ruin your business.
Companies that are not insured from insurance brokers in Auckland, against circumstances where they can face unjust claims from their employees, run a risk of going bankrupt. Since the damages an employer has to legally incur include everything from medical expenses to the legal costs, all of this could result in failed business productivity, and the company eventually going bankrupt.
It could have a negative impact on the work attitude of the employees.
Knowing that they are financially secured, in case of any uncertain event, the employees have a peace of mind and consequently are more stable and productive. But with the knowledge that hazards have not been removed and the company is not insured against any unanticipated incident, the employees cannot put their hearts and souls into the company.
All of this goes on to prove just how significant an employer’s liability insurance is for the company’s productivity and long-term growth. Besides being legally compelling, the employer's liability Insurance also gives a financial security to the employees hence, improving the progress of the company altogether.
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