{"id":592,"date":"2023-08-17T08:58:49","date_gmt":"2023-08-17T08:58:49","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/business-insurance\/faq\/what-does-employers-liability-insurance-cover\/"},"modified":"2026-02-03T12:50:17","modified_gmt":"2026-02-03T12:50:17","slug":"what-does-employers-liability-insurance-cover","status":"publish","type":"page","link":"https:\/\/www.simplybusiness.co.uk\/business-insurance\/faq\/what-does-employers-liability-insurance-cover\/","title":{"rendered":"What does employers’ liability insurance cover?"},"content":{"rendered":"\n
\n

What does employers’ liability insurance cover?<\/h1>\n\n\n\n
\n
Start your quote<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n

Employers\u2019 liability insurance<\/a> can cover compensation payments and legal costs if an employee sues their employer or ex-employer for a work-related illness or injury. The compensation amount may take into account things like medical costs and lost income.<\/p>\n\n\n\n

Employers\u2019 liability insurance is designed to cover the costs if an employee claims compensation for illness or injury that they believe has been caused by their work.<\/p>\n\n\n\n

For example, an office worker is badly injured when they trip over a cable running across the floor. A former employee is diagnosed with an illness related to asbestos exposure during their work. A builder is electrocuted by a piece of faulty electrical equipment supplied by their employer.<\/p>\n\n\n\n

In each case, a compensation claim is brought against the employer or former employer. The court can order the employer to pay compensation for injury, costs and other damages. The compensation figure may take into account things like medical care and lost income.<\/p>\n\n\n\n

Employers\u2019 liability insurance can cover the compensation payment and the legal costs, up to the limit of the policy.<\/p>\n\n\n\n

Do I need employers’ liability insurance?<\/h4>\n\n\n\n

If your business has at least one employee, you probably need employers\u2019 liability insurance<\/a>. A cover level of \u00a35 million of employers\u2019 liability insurance is the legal requirement for most businesses, although there are certain exemptions.<\/p>\n\n\n\n

Most employers are required to have at least \u00a35 million of employers\u2019 liability cover, or face a fine of up to \u00a32,500 per day. There are some exceptions to this rule, however: most public organisations and businesses that only employ close family members (as long as they\u2019re not incorporated as limited companies) don\u2019t necessarily need to have employers\u2019 liability insurance.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance for subcontractors?<\/h4>\n\n\n\n

This depends on whether you\u2019re hiring \u2018labour-only\u2019 or \u2018bona-fide\u2019 subcontractors. Subcontractors who are \u2018labour-only\u2019 work under your direction and use your tools and materials. They are legally considered employees, and so they need to be covered by your employers\u2019 liability policy. On the other hand, subcontractors who are \u2018bona-fide\u2019 work under their own direction and provide their own tools and materials, and they usually don\u2019t need to be covered by your employers\u2019 liability policy.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance if I am self employed?<\/h4>\n\n\n\n

If you\u2019re self-employed<\/a> and you work on your own, there\u2019s no need to have an employers\u2019 liability policy (unless a contract requires you to have one). You usually only need it if you employ somebody else. There are other business insurance covers<\/a> that could be useful for you, for example professional indemnity insurance<\/a> or public liability insurance<\/a>.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance for contractors?<\/h4>\n\n\n\n

According to advice provided by the Health and Safety Executive (HSE), you may not need employers\u2019 liability insurance if you\u2019re hiring an independent contractor who also works for other organisations. This can be a complicated area, so it\u2019s best to seek advice if you\u2019re not sure.<\/p>\n\n\n\n

Do I need employers liability insurance for a limited company?<\/h4>\n\n\n\n

If you run a limited company<\/a> and you employ one or more people, or have more than one director, you need employers\u2019 liability insurance. Even if you\u2019ve only got close family members on your staff, the fact that your company is incorporated as a limited company means that you\u2019re still required to have a policy.<\/p>\n\n\n\n

Do I need employers’ liability insurance for part-time workers?<\/h4>\n\n\n\n

Yes, you do need employers’ liability insurance for part-time workers. Unless you fall under one of the exemptions, it’s compulsory to have employers’ liability insurance if you have any employees, even if they’re part-time or temporary.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance for volunteers?<\/h4>\n\n\n\n

If you\u2019ve already got employers\u2019 liability insurance in place, it\u2019s likely that anyone who volunteers for you will be covered by this policy, although you should double check with your insurer. If you don\u2019t have an existing policy it\u2019s probably a good idea to get one so that you\u2019re covered in case one of your volunteers makes a compensation claim against you.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance for temporary employees or students on work experience?<\/h4>\n\n\n\n

Yes, you need employers\u2019 liability insurance to cover temporary staff, work experience students and anyone on a work placement.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance for one employee?<\/h4>\n\n\n\n

Yes. Even if you only have one employee you\u2019re required by law to have an employers\u2019 liability policy with a cover limit of at least \u00a35 million.<\/p>\n\n\n\n

Do I need employers\u2019 liability insurance if I don\u2019t have any employees?<\/h4>\n\n\n\n

If you don\u2019t have any employees you don\u2019t need employers\u2019 liability insurance (unless a contract explicitly requires it). However, make sure you fully understand how \u2018employee\u2019 is defined for the purposes of the legislation. If your company has more than one director or if you employ a certain type of subcontractor, you may be required to have employers\u2019 liability insurance.<\/p>\n\n\n\n

If you\u2019re not sure if you need employers\u2019 liability insurance, check the legislation<\/a> or seek professional advice.<\/p>\n\n\n\n

Popular trades we insure<\/h4>\n\n\n\n

At Simply Business we insure all kinds of trades like:<\/p>\n\n\n\n