View Full Version : Flight instructor limited company employers liability insurance

4th Apr 2019, 15:53
Does anyone know where I can get employers liability insurance for my limited company. I provide my services as a flight instructor though my own Ltd company and have a legal obligation to have this insurance if I have any employees. My company only employs my wife and myself, she only does the office stuff and I do the flight stuff. I'm struggling to find insurance because as soon as I mention aviation its a no, even though I'm not looking for aircraft accident insurance, only the legal insurance that comes with having a limited company to protect my employees.( This is not the same as public liability insurance which is provided by the flight school to cover me hurting or damaging something or someone.) Any ideas would be appreciated. Thanks

4th Apr 2019, 16:26
Our Club use Hiscox for officer liability insurance. I understand it only covers initial legal expenses in the event of any claim - if you're grossly negligent you're still liable. Worthwhile for initial defence against vexatious claims.

My limited company for the same purpose has one director and one company secretary. I wasn't aware of any insurance requirement as I don't think we're employees.


4th Apr 2019, 16:53
I am a sole director and have no employees. However, the law considers my self employed instructors as employees. Anyone who, for instance, does some decorating in the Club is also seen as an employee, even if they are not paid. Because the premises are on an airfield, none of the usual insurance companies are interested. Up to now I have only found Haywards could supply such cover, which means I can't shop around. I have the exact same problem with Public Liability. (Both are due later this month) The crazy thing is, Employers is mandatory but Public isn't!

4th Apr 2019, 19:06
To my knowledge all businesses, Ltd or not, are required to have public liability. Usually when an employer liability, is required, it is attached for this saves a lot of cost. The law does not define an employee by the way, as demonstrated on a numbers of occasions in HMRC tribunal cases. Each employee case is assessed on its own merits and complexity.

What is not always explained is the possible conflict of insurance liability. Most insurers will consider all instructors as being employees of the flying club where they work, whether they are salaried or self employed, even the unpaid decorator mentioned above. This being the case should the self employed instructor hold their own insurance the question will be who is liable to pay out on an event, the club policy or the individual instructors policy. When I have leased out an aeroplane to another flying club it was always necessary to add a clause to each policy stating which policy was to be first. Only one policy can be effective. This may explain why you have had difficulty obtaining your own policies for your circumstances.

I have known many instructors over the years who have formed limited companies for their instruction work but this has never made sense to me. Being a sole trader in the above instance is just as effective for tax purposes without the administration costs of companies house and certified accounts. A wife or anyone else can still act as an administrator or whatever else is required for you as a sole trader.

4th Apr 2019, 21:42
To my knowledge all businesses, Ltd or not, are required to have public liability. .

Name a country where you think that applies?

4th Apr 2019, 23:45
I haven't the faintest idea which various other countries may require, what is your point? If necessary I would certainly do my best to know. No doubt custardpsc you will enlighten us all, that is, if you know yourself

It is not UK law that a business has public liability insurance, true, I never said it was but it is normal that you do have it when you are a business. Often it is the landlord or a contractor that will demand it. If you are a member of a professional trade association it may be required. The bank may want to see it if you apply for a business loan. Be in no doubt customers and members will be appalled to discover that the club does not have insurance that protects them.

However you may wish to view it, it is best practice. In the case of flying you must be insane not to have public liability because you could be ruined. It is law to have employers liability in the UK.

5th Apr 2019, 06:16
I didn't want to be sole trader as I want to reduce my tax liability. Im not avoiding tax, but my normal PAYE job puts me into the higher tax brackets and if I fly under PAYE or sole trader, I'd be paying most of it out in tax and national insurance while being unable to offset much of it. It's not that much money but I think I pay the government enough already!
​​​​​​It is a legal requirement as a Ltd company to have employers liability insurance but not public liability insurance as the previous poster said. But the thing that gets me wound up is employers liability covers you for people on your premises or working for you getting hurt. My wife was going to be my only employee and wouldnt be near any aircraft and the biggest threat to her might be a paper cut, but the insurance agencies automatically think she will be hand swinging props and don't want to know. I'll try some of the companies below but might be easier not to have her as an employee but just top up her class 2 NI contributions and give her dividend payments as a shareholder.
Wonder if I then still need this insurance if I'm technically the only employee?
The flight school I work with has comprehensive public liability insurance for all its 'employees' whether they are Ltd company contractor or staff, so I'm covered if something goes wrong in that respect.
Thanks for the information and if anyone else has other ideas then it's really appreciated if you can share them.

5th Apr 2019, 07:29
Some time ago I watched a CAA Examiner brief for overseas Examiners, it raised the issue of insurance so I called the CAA and asked where it could be obtained. Their response was "What Insurance are you talking about?" I then whent round in a big loop and finished up where I started, they had just copied the requirement from the Legislation and didn't have a clue.
I contacted Max Stein (http://www.flyingcover.co.uk/) who specialises in Aviation Insurance but he drew a blank as well.
These people might be worth a try https://www.bearinsurance.co.uk/
or Besso (http://www.besso.co.uk/web/divisions/aviation1)

5th Apr 2019, 07:45
my point was your statement was misleading. It wasn't clear what country we are talking about, this being an international forum and the OP didn't mention which country they were in. But, in no country that I am aware of is there a *requirement* to have Public Liability. Best practice - sure. Requirement, no.

As for employees liability in the UK, its only a legal requirement if you have at least one employee . If you are self employed/sole trader and employ only close family members you don't need it. If youa re a ltd co then you always need it.

5th Apr 2019, 08:07
Public liability is unlikely to provide cover outside of a Club or School premises, on the way to the aircraft is covered by the airfield. Once in the aircraft it's the aircraft policy...............

5th Apr 2019, 10:20
avtur007 I still don't understand why you believe a Ltd company is the only/best answer to lowering your tax liability with all the associated cumbersome and expensive drawbacks. Although you are employed on the high rate of tax, any income you draw from your Ltd company will also bare the high rate of tax plus the accountant and Companies House and insurance costs.

Although you are a p.a.y.e. employee in your main job you can separately operate a Schedule 'D' account with HMRC for your self employed work as a flight instructor. This allows you to fully exploit all legitimate expenses as a flight instructor including paying your wife for the work she does for you. All income be it from your Ltd company or self employment profit will be lumped together for your end of year tax assessment. Don't ignore that she should declare all income for her tax purposes also. If your wife doesn't have an income or is below the tax threshold your payments to her could be sufficient to wipe out all your profits and keep her clear of tax or at least payed at the lower rate, so no additional tax for you at the high rate. The income from your part time instructing will not be a lot so the substantial expenses of flight instruction may well mean you do not make a taxable profit instructing or the tax due may be lower than the costs of running a Ltd company.

5th Apr 2019, 10:26
As for employees liability in the UK, its only a legal requirement if you have at least one employee.But if that one employee is you and you own at least 50% of the business, employer's liability insurance is not required.