Employers' Liability Insurance
Compulsory UK insurance that pays compensation and legal costs if an employee is injured or made ill by their work and claims against you.
Actuarial & Contractual Mechanics
Under the Employers' Liability (Compulsory Insurance) Act 1969, an employer must hold at least £5 million of cover from an authorised insurer and display the certificate. For a sole trader the duty starts the day you take on an employee; see do sole traders need employers liability insurance. It is separate from public liability, which covers third parties, and is summarised in our sole trader insurance guide. Check worker status in the subcontractors guide, and note some risks sit in an exclusion.
A sole trader roofer hires an employee at £120 a day. The employee falls through a skylight and claims £85,000 for injuries and lost earnings. Employers' liability pays the claim and defence costs up to the policy limit. Without it, the roofer pays personally and may also face a fine of up to £2,500 per day uninsured.
Wallet risk: no cover means an injury claim comes straight from your savings, plus fines. Assuming a casual worker is self-employed is a common error, so check status before relying on it. Compare structure in sole trader vs limited company insurance.
Frequently Asked Questions About Employers' Liability Insurance
Clear definitions, policy implications, and related coverage calculators.