Is employers' liability insurance a legal requirement in the UK?

Yes. Under the Employers' Liability (Compulsory Insurance) Act 1969, if you employ anyone you must hold employers' liability insurance with a minimum limit of £5 million. The Health and Safety Executive can fine you £2,500 for every day you are uninsured, and £1,000 if you cannot show your certificate.

Do I need employers' liability insurance for part-time or casual staff?

Yes. The requirement covers part-time, temporary, seasonal and casual workers, apprentices, and people on work experience. If someone works under your direction and control, assume they count as an employee until a broker confirms otherwise.

Do I need it for subcontractors?

It depends on the type. Labour-only subcontractors who work under your direction, with your tools and to your schedule, are usually treated as employees and must be covered. Bona fide subcontractors who price their own work, use their own tools and hold their own insurance usually don't — but getting this classification wrong is one of the most common and costly mistakes in small business insurance.

Are there any exemptions?

Very few. Family businesses employing only close relatives, companies with a single director who owns 50% or more of the shares, and businesses with no employees at all are generally exempt. If you employ anyone else — even one part-timer — you need cover.

Guides · 5 min read

Do I need employers' liability insurance?

Unlike most business insurance, employers' liability isn't optional. If you employ anyone in the UK — even one part-timer — the law requires it, and the fines for going without run at £2,500 per day. Here's how to work out whether it applies to you.

The legal position

The Employers' Liability (Compulsory Insurance) Act 1969 requires every UK employer to hold at least £5 million of employers' liability cover. Most policies provide £10 million as standard. The policy pays out if an employee is injured or becomes ill because of their work and claims compensation against you — and it must come from an authorised insurer.

The Health and Safety Executive enforces it. You can be fined £2,500 for every day you trade uninsured, and a further £1,000 if you can't produce your insurance certificate when asked. This is not a grey area: it's one of the few genuinely compulsory insurances in the UK.

Who counts as an employee?

More people than most business owners expect:

Part-time, temporary and seasonal staff — hours don't matter, the relationship does.
Apprentices, trainees and people on work experience.
Labour-only subcontractors working under your direction, with your equipment, to your schedule.
Volunteers in some arrangements — worth checking with a broker if you rely on them.

The subcontractor question trips up more small businesses than any other. If you direct how, when and where someone works, insurers and the HSE will usually treat them as an employee — whatever their invoice says.

The (narrow) exemptions

You're generally exempt only if you employ no one, employ only close family members in a family business, or run a company whose only employee is a director owning 50% or more of the shares. Everyone else needs cover from the first day the first employee starts.

Why a specialist broker beats a default online policy

Employers' liability is priced on what your people actually do: work at height, heat tools, machinery, driving, manual handling, and your claims history. A misdescribed workforce is priced on worst-case assumptions — or worse, gives an insurer grounds to dispute a claim. A specialist employers' liability broker presents your workforce accurately to the right market and structures cover around your real subcontractor arrangements, so you're compliant in practice, not just on paper.

Common questions

Is employers' liability insurance a legal requirement in the UK?: Yes. Under the Employers' Liability (Compulsory Insurance) Act 1969, if you employ anyone you must hold employers' liability insurance with a minimum limit of £5 million. The Health and Safety Executive can fine you £2,500 for every day you are uninsured, and £1,000 if you cannot show your certificate.
Do I need employers' liability insurance for part-time or casual staff?: Yes. The requirement covers part-time, temporary, seasonal and casual workers, apprentices, and people on work experience. If someone works under your direction and control, assume they count as an employee until a broker confirms otherwise.
Do I need it for subcontractors?: It depends on the type. Labour-only subcontractors who work under your direction, with your tools and to your schedule, are usually treated as employees and must be covered. Bona fide subcontractors who price their own work, use their own tools and hold their own insurance usually don't — but getting this classification wrong is one of the most common and costly mistakes in small business insurance.
Are there any exemptions?: Very few. Family businesses employing only close relatives, companies with a single director who owns 50% or more of the shares, and businesses with no employees at all are generally exempt. If you employ anyone else — even one part-timer — you need cover.

How CoverBroker fits in

CoverBroker is not an insurance broker and doesn't arrange cover. Upload your current employers' liability schedule or statement of fact and we'll introduce you to a specialist broker matched to your trade and workforce — with an optional free AI review of your existing policy first. Free, no obligation.

Get matched with an employers' liability specialist

Upload your policy documents — free, no obligation.

Upload my documents