Do I need employers’ liability insurance if I am self-employed?

Do you employ anyone?

If you have at least one employee, you probably need employers’ liability insurance. The minimum legal requirement is to have cover of £5 million.

If you are not insured, you can be fined up to £2,500 a day for every day you don’t have it.

Who do you employ?

You need employers’ liability insurance for all types of employees. This includes part-time employees, volunteers, people on work experience and trainees.

Close family members may be excluded from this requirement. Whether you need employers’ liability insurance to cover them can depend on how your business is set up, i.e. whether you are a limited company.

If you are in any doubt, speak to your insurance provider. Alternatively, approach another professional such as a solicitor or accountant for help.

The only other exception that may apply is whether you employ someone based overseas. Again, you should check with your insurance provider as to whether you qualify for an exemption.

Do you operate as a limited company?

If you operate as a limited company and employ one (or more) people, you will need employers’ liability insurance. This includes a situation where you have more than one director.

It’s important to check how your company or business is set up. Don’t hesitate to take professional advice, if necessary.

What about sub-contractors?

Whether you need employers’ liability insurance will depend on whether the sub-contractor is legally considered to be ‘an employee’.

This depends on the extent to which they work independently from you, or use your tools and materials.

If they also work for other organisations, this can be a sign that they are wholly independent. If they are, you will not need employers’ liability insurance.

If they work solely under you direction, you will probably need to get insured.

This can be quite a complex area of law. You should take professional advice to help determine the status of any contractors you use.

What if you don’t employ anyone?

If you are self-employed and work entirely on your own, you won’t need employers’ liability insurance. However, it is important to remember that you may need other types of insurance cover, such as public liability, product liability or professional indemnity insurance.