Do I need employers' liability insurance?
If you employ anyone, employers' liability insurance is a legal requirement, and you must hold at least 5 million pounds of cover under UK law.
When the law applies
Employers' liability (EL) is one of the few insurances the law actually demands. If you employ staff, you're generally required to hold cover with a statutory minimum of 5 million pounds. It can apply more widely than people expect, including:
- Full-time and part-time employees
- Casual, temporary and seasonal workers
- Labour-only subcontractors working under your control
Failing to hold valid EL cover when required can lead to heavy fines for each day you're uninsured. A genuine sole trader with no staff usually doesn't need it. If you ever take on help, add EL before they start and compare quotes to keep cover right-sized.
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I'm a sole trader, do I need it?
Generally no, if you work entirely alone with no employees or labour-only subcontractors, EL isn't legally required.
Do family members count as employees?
Often yes once you employ them in the business; some very small family firms are exempt, so check your situation.
What about bona fide subcontractors?
Independent subcontractors with their own cover may not need to be on your EL, but those under your direction usually do.