Employers' Liability Insurance
As an employer you are responsible for the health and safety of your employee’s whilst they are at work.
Quick Summary
- Legally required for most employers: Employers’ Liability Insurance is compulsory under UK law. Fines reach £2,500 for every day you operate without valid cover.
- Wider than you think: Part-time staff, apprentices, volunteers, and labour-only subcontractors all typically count as employees for insurance purposes.
- Minimum £5 million cover: The law sets a floor of £5 million, but most UK insurers provide £10 million as standard.
- Independent broker advantage: As an independent broker, Daines Kapp compares the market and helps high-risk trades present their risk favourably to insurers.
Employers’ Liability Insurance: Your Legal Duty and How We Help
Employers’ Liability Insurance is more than a legal tick-box. It is the financial backbone that protects your business when your people need it most. If an employee is injured or falls ill because of their work, the compensation costs can be devastating. At Daines Kapp, we help you navigate the UK legislation and make sure your workforce — and your bottom line — are fully protected.
Whether you run a small office or a large construction firm, your obligations under the Employers’ Liability (Compulsory Insurance) Act 1969 apply from the moment you take on your first member of staff. We are here to strip away the jargon, explain what the law actually requires, and arrange cover that fits your business.
What is Employers’ Liability Insurance?
Employers’ Liability Insurance covers the cost of compensating employees who are injured or become ill as a result of their work. It pays your legal defence costs and any compensation awarded if your business is found liable.
Safety standards in the UK are high, but accidents still happen. A slip on a wet floor, a fall from height, or a long-term condition like repetitive strain injury can all lead to significant claims. Without this cover, you would meet those costs from your own funds — which could be enough to shut a smaller business. Beyond the financial risk, failing to hold valid cover carries a statutory fine of £2,500 for every day you are uninsured.
Who Counts as an “Employee”?
This is the most common area of confusion. You might believe you have no “employees” because you do not have full-time staff on PAYE. In practice, the legal definition is considerably wider. The table below summarises the main worker types and whether they typically need to be covered under your Employers’ Liability policy.
| Worker Type | Typically Covered? | Key Point |
|---|---|---|
| Full-time & part-time staff | Yes | Core obligation under the 1969 Act |
| Labour-only subcontractors | Yes | Work under your supervision, use your tools, follow your hours |
| Apprentices & trainees | Yes | Treated the same as direct employees |
| Volunteers & work experience | Yes | Even unpaid workers fall within scope |
| Bona-fide subcontractors | No | They use their own tools, set their own hours, hold their own insurance — but you must verify their cover |
If you use bona-fide subcontractors, you must have a system to check that they hold their own valid Employers’ and Public Liability policies. If their cover lapses and they are injured on your site, the claim can fall back on you.
How Much Cover Do You Need?
The law sets a minimum limit of indemnity of £5 million. In practice, most standard UK insurers — including those on the Daines Kapp panel — provide £10 million as standard. For larger employers or higher-risk trades, we can arrange additional limits where required.
Legal Exemptions
There are narrow situations where the compulsory insurance requirement does not apply:
- Family businesses: If your business is not incorporated as a limited company, and every employee is a close family member (spouse, parent, sibling, or child), you may be exempt.
- Sole employee-owner: If you operate as a limited company and you are the only employee, holding 50% or more of the issued share capital, you may be exempt.
- Certain public bodies: Some NHS trusts and government bodies are exempt under the regulations.
These exemptions are specific and narrow. If you are unsure whether they apply to your business, speak to us before assuming you are not required to hold cover. The Health & Safety Executive publishes a brief guide for employers that sets out the full position.
The Daines Kapp Approach
We do not simply sell you a policy and move on. As your trusted independent broker, we help you present your risk to insurers in the best possible light. For higher-risk trades such as arboriculture, construction, or manufacturing, demonstrating that you have robust Health & Safety policies in place can make a genuine difference to your premium.
We also help you maintain the records you are legally required to keep. Employers’ Liability certificates must be retained for 40 years — because industrial disease claims (such as asbestosis or noise-induced hearing loss) can take decades to emerge, and the insurer on risk at the time of exposure is responsible for the claim.
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Frequently Asked Questions About Employers’ Liability Insurance
Does Employers’ Liability Insurance cover staff working from home?
Yes. Your duty of care extends to every location where your staff work, including their own homes. If an employee develops back problems from a poor home workstation, or trips over a trailing cable, you could still be liable. We recommend carrying out home workstation risk assessments as a practical precaution alongside your cover.
I only employ casual workers — do I still need this insurance?
Yes. Casual workers are entitled to exactly the same protection as permanent staff. If you pay them, supervise their work, and control their hours, you almost certainly need Employers’ Liability Insurance. The number of hours worked per week makes no difference to the legal requirement.
Do I need to display my Employers’ Liability certificate?
Yes. You must display a current copy of your certificate in a place where employees can easily read it. Since 2008, businesses have been permitted to display it electronically — for example on an intranet — provided all staff can access it. Failure to display the certificate is itself a separate offence, carrying a fine of up to £1,000.
What happens to claims from former employees?
Some occupational diseases take decades to manifest — asbestosis and noise-induced hearing loss are the most well-known examples. The insurer on risk at the time the employee was exposed to the hazard is responsible for the claim, even if the employee left your company years ago. This is why you must keep records of every Employers’ Liability certificate you have held for at least 40 years.
What is the difference between Employers’ Liability and Public Liability Insurance?
Employers’ Liability covers claims made by your own employees who are injured or fall ill because of their work. Public Liability covers claims made by third parties — customers, visitors, members of the public, or other contractors — who are injured or suffer property damage because of your business activities. Both covers are essential for most UK businesses, and we can arrange them together as part of a combined package.
Can I get Employers’ Liability Insurance as a sole trader?
Yes, if you take on staff — even one part-time employee or a paid apprentice — you are legally required to hold Employers’ Liability Insurance regardless of your trading structure. Sole traders with no employees at all do not need the cover. If your situation changes and you take on your first member of staff, cover must be in place from day one.
