Do I Need Employers Liability Insurance as a Tradesperson?
If you ever take on help — a labourer for a big job, a mate who helps out occasionally, an apprentice — employers liability insurance is something you need to know about.
In fact, if you employ anyone in the UK, employers liability insurance isn’t optional. It’s a legal requirement. And the penalties for not having it are significant.
This guide covers exactly who needs employers liability insurance as a tradesperson, what it covers, how much it costs, and where to get it.
What Is Employers Liability Insurance?
Employers liability insurance protects you if an employee suffers an injury or illness as a result of working for you and makes a compensation claim.
For example:
- An apprentice cuts their hand badly using equipment on your job site and claims compensation
- A labourer you’ve taken on for a week develops a back injury from lifting heavy materials and sues for damages
- A member of your team is involved in an accident on site and is unable to work — they claim loss of earnings against you
Without employers liability insurance, you’d be personally responsible for any compensation awarded. Claims can run into hundreds of thousands of pounds for serious injuries.
Is Employers Liability Insurance a Legal Requirement?
Yes — for most businesses that employ staff, employers liability insurance is a legal requirement under the Employers’ Liability (Compulsory Insurance) Act 1969.
You must have a minimum of £5 million of cover — though most policies provide £10 million as standard.
You must also display your employers liability certificate — either physically in your workplace or electronically where employees can access it.
The penalties for not having it are serious:
- You can be fined £2,500 for every day you’re trading without valid employers liability insurance
- If an employee is injured and you’re uninsured, you’re personally liable for any compensation awarded
Who Counts as an Employee?
This is where many tradespeople get caught out. The definition of “employee” for insurance purposes is broader than you might think.
You likely need employers liability insurance if you have:
- Full-time or part-time employees on your payroll
- Apprentices or trainees
- Casual or seasonal workers — even occasional labourers
- Labour-only subcontractors who work under your direction and use your tools and equipment
- Volunteers working under your supervision on a regular basis
You may not need it if:
- You’re a genuine sole trader with no staff whatsoever
- You use fully independent subcontractors who have their own insurance, use their own tools, set their own hours, and work for multiple clients
The key question is whether the person works under your direction and control. If they do, they’re likely classed as an employee for insurance purposes — regardless of how you pay them or what you call them.
If you’re unsure, the safest approach is to get employers liability cover. The cost is modest compared to the risk of getting it wrong.
Are There Any Exemptions?
There are a small number of businesses that are legally exempt from the requirement for employers liability insurance. These include:
- Businesses where the sole employee owns more than 50% of the share capital — i.e. owner-managed limited companies with no other staff
- Family businesses where all employees are close family members — though this exemption doesn’t apply if the business is incorporated as a limited company
For most sole traders taking on any kind of help, these exemptions don’t apply. If in doubt, get covered.
What Does Employers Liability Insurance Cover?
Employers liability insurance covers compensation claims made by employees who suffer:
- Physical injuries at work — accidents, falls, cuts, crush injuries
- Industrial diseases or illnesses caused by working conditions — for example, hearing loss from prolonged noise exposure, or respiratory conditions from dust or fumes
- Psychological injuries — stress-related illness caused by working conditions
It covers both the compensation awarded to the employee and your legal costs in defending the claim.
What Employers Liability Insurance Doesn’t Cover
It’s worth being clear on what isn’t covered:
- Injuries to members of the public — that’s covered by your public liability insurance
- Damage to customer property — also covered by public liability
- Your own injuries as the business owner — you’d need personal accident or income protection insurance for that
- Claims arising from work done before the policy started — always check your retroactive cover dates
How Much Does Employers Liability Insurance Cost?
The cost depends on several factors:
- The number of people you employ
- The nature of the work — higher-risk trades cost more to insure
- Your claims history
- The level of cover
For a sole trader taking on one or two casual labourers, employers liability insurance typically costs from around £60–£150 per year when added to an existing public liability policy.
Buying it as part of a combined tradesman insurance package — public liability, employers liability, and tools cover together — is usually the most cost-effective approach.
How to Get Employers Liability Insurance as a Tradesperson
The simplest approach is to use a comparison platform like Simply Business, which lets you compare quotes from multiple insurers and add employers liability to your existing cover — or take out a combined package from scratch.
What to have ready when getting a quote:
- Your trade and the nature of the work you do
- Your annual turnover or estimated turnover
- The number of people you employ or expect to employ
- Details of any previous claims
👉 Compare employers liability insurance quotes at Simply Business
Employers Liability vs Public Liability — What’s the Difference?
This is one of the most common points of confusion for tradespeople.
Public liability insurance covers claims from members of the public — customers, bystanders, neighbours — who are injured or suffer property damage as a result of your work.
Employers liability insurance covers claims from your employees — the people who work for you — who are injured or become ill as a result of working for your business.
You need both if you employ staff. They cover completely different risks and one doesn’t substitute for the other.
Do Subcontractors Need Their Own Insurance?
If you use subcontractors, the situation depends on how they work.
Genuine independent subcontractors — who set their own hours, use their own tools, work for multiple clients, and carry their own insurance — are responsible for their own cover. You should always ask to see proof of their public liability insurance before they start work.
Labour-only subcontractors — who work under your direction, use your tools, and work exclusively for you — are likely to be treated as employees for insurance purposes. Your employers liability policy should cover them, but check with your insurer.
When in doubt, ask your insurance provider directly. Getting this wrong could leave you exposed if a subcontractor is injured on your job.
The Bottom Line
If you employ anyone — even occasionally, even informally — employers liability insurance is a legal requirement and not something to take chances with. The fine for operating without it is £2,500 per day and the financial exposure from an uninsured claim is potentially far greater.
The cost of cover is modest. Getting a quote takes minutes. And buying it as part of a combined tradesman insurance package alongside your public liability cover is the most straightforward and cost-effective approach.
Simply Business makes it easy to compare quotes from multiple insurers and get the right cover in place quickly.
👉 Compare employers liability insurance quotes at Simply Business
And once your business protection is sorted, make sure your day-to-day operations are running as efficiently as possible. Tradify handles everything from quoting and job management through to invoicing and payment chasing — all in one platform built specifically for UK tradespeople.
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