Is employers' liability insurance a legal requirement?

Yes. Under the Employers' Liability (Compulsory Insurance) Act 1969 most UK employers must hold it from the day they employ anyone, with a minimum level of cover set at £5 million. Penalties can be charged for each day a business trades without it.

Do I need it if I'm the only director?

A company employing only its owner, where that person holds at least 50 percent of the shares, is generally exempt. The exemption is narrow, so it is worth checking rather than assuming.

Do I need to display the certificate?

Employers must make the certificate available to employees, which today usually means an accessible electronic copy. Keeping past certificates matters too, because injury claims can be brought years later.

BUSINESS GUIDE

Employers' liability insurance explained

This is the one UK businesses cannot choose. Employ someone, and you generally need employers' liability cover from day one — including some people you might not think of as employees.

Last reviewed August 2026

What the cover does

Employers' liability responds when an employee is injured or becomes ill and claims that your business was at fault. It pays compensation and the legal costs of defending the claim.

The compulsory minimum level of cover in the UK is £5 million, though policies are commonly issued at £10 million because contracts often ask for it.

Who counts as an employee

The test is practical: do you direct the work, set the hours, provide the equipment, and pay the person rather than invoice-based supply? If so, they are likely an employee for these purposes regardless of what the paperwork says.

Full-time, part-time and casual staff
Apprentices, trainees and students on placement
Temporary and seasonal workers you supervise
Labour-only subcontractors working under your direction
Some family members working in the business

The exemptions

The main exemption covers a company that employs only its owner, where that person holds at least 50 percent of the issued share capital. Family businesses employing only close relatives can be exempt, though this does not apply to limited companies.

Because the exemptions are narrow and often misread, the safest approach is to describe your actual staffing arrangement to a specialist and let them confirm your position.

Why claims arrive late

Employers' liability claims can be brought long after the event, particularly for hearing loss, back injuries, respiratory conditions and industrial disease. The policy that matters is the one in force when the exposure happened.

That is why keeping every past certificate is a genuine business asset. Insurers and solicitors will ask which insurer covered you in a specific year.

How it fits with your other cover

Employers' liability handles your staff. Public liability handles the public and clients. Professional indemnity handles claims about your advice or work. Most small businesses arrange the first two together and add the third when they give advice or design.

Check where you stand

Tell us what your business does and who works for you. A UK insurance specialist calls you back to confirm what is required and arrange it.

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Common questions

Is employers' liability insurance a legal requirement?: Yes. Under the Employers' Liability (Compulsory Insurance) Act 1969 most UK employers must hold it from the day they employ anyone, with a minimum level of cover set at £5 million. Penalties can be charged for each day a business trades without it.
Who counts as an employee?: It is about the working relationship, not the job title. Casual staff, part-timers, temporary workers, apprentices and labour-only subcontractors you direct and control are typically treated as employees. Genuinely self-employed contractors who use their own equipment and carry their own liability cover usually are not.
Do I need it if I'm the only director?: A company employing only its owner, where that person holds at least 50 percent of the shares, is generally exempt. The exemption is narrow, so it is worth checking rather than assuming.
Do I need to display the certificate?: Employers must make the certificate available to employees, which today usually means an accessible electronic copy. Keeping past certificates matters too, because injury claims can be brought years later.

Keep reading

General information only, written for UK readers. It is not insurance advice and does not take account of your circumstances. Cover Sorted collects your enquiry and passes it to an FCA-authorised insurance specialist. Cover Sorted does not provide quotations, comparisons or recommendations.