Do I need employers' liability insurance? Do I need employers' liability insurance?

If you employ people in the UK — regardless of whether they're full-time, part-time, temporary, contractors or apprentice workers — you may have a legal obligation to have employers' liability cover in the UK.

There are a few exemptions, but most of the time you'll need to have it if you have employees. Without it, you could be fined up to £2,500 for each day that you were operating without employers' liability.

You could also be fined up to £1,000 if you fail to present your employers' liability certificate if requested by the Health and Safety Executive (HSE). You must also display your certificate, either digitally or physically on their business premises, so that employees can see it, too.

Even if you run one of the few businesses that are exempt, this type of cover can come in handy if an employee makes a claim against you due to work-related injury or illness. Compensation costs and legal fees can make a serious dent in your finances, and without employers' liability you'd have to pay those fees out of your own pocket.

Employer’s liability is a legal requirement for most businesses in the UK with their own staff, and is designed to provide financial cover in case one of your employees is injured at work. It applies to almost all types of employees, including full-time, part-time, temporary, apprentices or volunteers.

As a rule of thumb, if you employ anyone — even without a written contract — UK law usually says you need cover. This includes labour-only subcontractors or freelancers you control, like telling them where and when to work or supplying their tools.

But there are some exceptions. You won’t need it for bona fide subcontractors who work independently, or if you employ immediate members of your family.

If you're ever unsure, it's best to ask your insurer.

You're usually exempt from needing employers’ liability insurance under UK law if you're the sole director of a limited company with no other employees. This applies as long as you own more than 50% of the shares. Even though you’re technically an employee of your company, the law makes an exception in this scenario.

It’s important to remember that some clients or businesses may still require you to have employers’ liability cover as part of their own policies or contracts, especially if you work on-site or represent their brand in any way. So even if you’re not legally required to have it, it could still be worth getting.

The HSE defines an employee as someone who you employ under a verbal or written contract, regardless of what you call them or what their tax status is. The UK law states that an employee contract can be expressed or implied, so even if it's not in writing, you still need to have the required level of cover.

The definition of an employee can include if:

• You deduct national insurance and income tax from the money you pay them
• You control where and when they work
• You supply the majority of the equipment they use
• They work exclusively for you
• They cannot employ a substitute if they are unable to work
• They do the same work as other employees and work in the same conditions

Under this definition, if you employ freelancers who work for you remotely, use their own equipment and you don't employ anyone else, the HSE may not fine you for not having employers' liability insurance. This is because you're not in control of their working environment and work-related health and safety issues.

If you're unsure of whether you need employers' liability insurance, we'd recommend having a chat with us — we'll be able to help.

According to the HSE, legally, you don’t always need employers’ liability insurance for volunteers — especially if they’re helping out occasionally and aren’t under contract. But if you're telling them when to work, what to do and how to do it, the law might treat them like employees, even if they're unpaid.

If you already have an employers’ liability policy, volunteers might be covered — but don’t assume. Some insurers include them automatically; others need you to let them know. If you're planning to bring volunteers on regularly or for longer periods, it’s a good idea to check your policy documents or speak to your insurer, just to be safe.

If a volunteer gets injured while helping your business, you’ll want the right cover in place — and a quick chat with your insurer can make all the difference.

Yes — any business that's incorporated as a limited company and has any number of employees, no matter if it's one or 100, needs employers' liability insurance.

If you're a sole trader and work by yourself or only employ close family members, there's no legal requirement to get employers' liability insurance, unless you’re contractually obliged.

There are other types of cover that you might want to consider as a sole trader, such as public liability and professional indemnity insurance.

If you’re employing subcontractors, your legal obligation to have employers’ liability depends on the type of subcontractor you're employing.

There are two types of subcontractors:

• Bona-fide subcontractors: those who work under their own direction and provide their own working materials, including tools
• Labour-only subcontractors: those who work under your direction and use materials supplied by you

Under these definitions, you do not legally need employers' liability insurance for bona-fide subcontractors, but you will for labour-only subcontractors. As a rule of thumb, any instance where you're in control of your workers health and safety requires employers' liability insurance.

If you employ immediate members of your family, you are exempt from having employers' liability insurance.

Immediate family members include:

• A spouse such as your husband, wife or civil partner
• Children
• Siblings, including half-brothers and sisters
• Step-siblings and step-children
• Grandparents

However, if you have a limited company, this exemption does not apply and you'll need to have cover for employees, even if they're family members.

Yes, employers' liability insurance is a legal requirement even if you only have unpaid workers, like those on work experience.

In the UK, you don’t legally need employers’ liability insurance if one or more of the following apply:

• You're the sole director of a limited company
• You own more than 50% of the shares in the business
• You don’t employ anyone else, even part-time or casually

• You only work with bona fide subcontractors — that’s people who:

  • Work under their own direction
  • Use their own tools and materials
  • Are responsible for their own health and safety

• You hire freelancers or contractors who:

  • Work remotely, on their own schedule
  • Aren’t supplied with tools or equipment by you
  • Aren’t under your direct supervision or control
• You hire immediate family members

It’s important to remember, though, even if you’re legally exempt, some clients or organisations might still ask for proof of employers’ liability cover before working with you.

If you're not sure whether you need employers' liability insurance, feel free to get in contact with us, and we'd be happy to talk it through with you. Alternatively, you can view the HSE's guide for employers.