Yes. In the UK, most businesses that employ staff must have employers’ liability insurance by law. You’re legally required to hold at least £5 million of cover (most policies provide £10 million as standard). Without it, you could face fines of up to £2,500 for every day you’re uninsured.
FAQ Category: Employers' Liability
Not every business needs employer liability insurance. You may be exempt if:
- You only employ close family members.
- You are a sole director with no other employees.
- Certain public organisations, such as government departments, may also be exempt.
For the majority of businesses, however, employers’ liability insurance cover is compulsory.
The employers’ liability register is maintained by insurers, and it records details of active and expired policies so that past claims can be traced. While insurers are responsible for updating it, as a business owner you must keep your employer’s liability insurance certificate accessible and up to date.
You should arrange employers’ liability insurance as soon as you hire your first employee, even if they’re part-time, temporary, or a volunteer. Delaying cover could leave you exposed to claims and potential fines. Many businesses choose to arrange public liability and employers’ liability insurance together to ensure they’re fully protected before staff start work.
The main difference is who the cover protects:
- Employers’ liability insurance protects your business if an employee is injured or becomes ill because of their work.
- Public liability insurance covers claims made by third parties such as customers, suppliers, or members of the public.
Most small businesses need both types of cover for full protection.