Employers' liability (EL) insurance is compulsory for most UK employers in England, Scotland and Wales as soon as they take on an employee. It must cover at least £5 million, come from an authorised insurer, and the certificate must be displayed where staff can see it. As of October 2026, you can be fined £2,500 for every day you're not insured.
It's a step on GOV.UK's checklist for employing someone for the first time, and one of the easiest to forget. Here's what the law requires and who's exempt.
What EL insurance covers
It pays compensation if an employee is injured or becomes ill because of the work they do for you. The HSE adds that it covers injuries and illness whether they happen on or off site, and former employees can claim too, which matters for diseases that take years to appear. Motor accidents while working may be covered by your motor insurance instead.
It's not the same as public liability insurance. Public liability covers claims from members of the public and other businesses, not employees, and it's generally voluntary. EL is compulsory.
The legal requirements
| Requirement | Detail (as of October 2026) |
|---|---|
| When | As soon as you become an employer |
| Minimum cover | £5 million, which includes costs |
| Insurer | Authorised, checkable on the Financial Conduct Authority register |
| Certificate | Displayed where employees can access it, at work, on your website or intranet, and shown to inspectors on request |
| Fine for no insurance | Up to £2,500 for every day without it |
| Fine for not displaying the certificate | Up to £1,000 |
The HSE says that in practice most insurers offer cover of at least £10 million. A group of companies can share one policy, but the group as a whole needs at least £5 million, and if you have more than one policy the total must reach that minimum.
Who's exempt
- Employers whose only employees are close family members, such as a spouse or civil partner, parent, grandparent, child, grandchild, step-relative, brother, sister, half-brother or half-sister
- Companies that employ only their owner, where that person owns 50% or more of the issued share capital
- Employers whose only staff are based outside England, Scotland and Wales
- Most public bodies, including government departments, local authorities and NHS bodies
Here's the catch the GOV.UK summary doesn't spell out but the HSE guide does: the family exemption doesn't apply to family businesses incorporated as limited companies. If your family business is a company, you need EL insurance even if every employee is related to you.
Does a freelancer count as an employee?
Not automatically, and not automatically not. The HSE says what matters is the real nature of the relationship and how much control you have, not what you call it or the person's tax status. You may need cover for someone where you:
- Deduct tax and National Insurance from their pay
- Control where, when and how they work
- Supply their materials and equipment
- Require them personally and they can't send a substitute
- Treat them the same as your other employees
You may not need it where they work for others too, bring most of their own kit, are clearly in business for themselves, can send a substitute and you don't deduct tax. Volunteers, unpaid students and work experience pupils are usually covered under an existing policy, but talk to your insurer if they're with you for long or doing unusual work.
Staff abroad and staff coming here
You need EL for anyone normally based in England, Scotland or Wales, including offshore installations. You don't need it under GB law for staff based abroad, though local law may require something. And if someone normally based abroad spends more than 14 days continuously in Great Britain, or more than seven days offshore, you need cover for them.
What insurers can't do
The HSE lists conditions an insurer can't use to refuse to pay compensation, for example because you didn't keep specified records, or didn't report an incident when told to. The insurer must pay the full compensation agreed or awarded, though you can agree to pay part of it back. If your failure to protect staff caused the claim, the policy may let the insurer recover its costs from you, so it's no substitute for health and safety.
How to get compliant
- Before your first employee starts, get a quote for at least £5 million of EL cover (as of October 2026).
- Check the insurer is authorised on the Financial Conduct Authority register.
- Display the certificate where staff can access it, physically or online.
- Tell staff where an electronic certificate is and make sure they can open it.
- Diarise the renewal and file every certificate you receive.
Keep old certificates anyway
There's been no legal requirement to keep out-of-date certificates since 1 October 2008, but the HSE strongly advises keeping a complete record. Some diseases appear decades after exposure, and a former employee can claim for the period they were exposed. Without the old insurance details, you could end up paying that claim yourself.
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My verdict
If you employ anyone in Great Britain, get EL insurance before their first day, check the insurer on the FCA register, and put the certificate somewhere staff can see it, the intranet counts. Don't rely on the family exemption if you trade through a limited company, and keep every old certificate in a folder you'll still have in twenty years.
Business owners who have dealt with insurance and staffing can submit a small business guest post and explain what they learned.
Frequently asked questions
Is employers' liability insurance a legal requirement in the UK?
Yes, for most employers in England, Scotland and Wales from the day they become an employer.
How much employers' liability cover do I need?
At least £5 million, and the minimum includes costs. The HSE says most insurers offer at least £10 million.
What is the fine for not having employers' liability insurance?
As of October 2026, up to £2,500 for every day you're not insured, and up to £1,000 for not displaying the certificate.
Do I need employers' liability insurance if I only employ family?
Not if all your employees are close family, unless the business is a limited company. The family exemption doesn't apply to incorporated family businesses.
Do I need employers' liability insurance as a one-person limited company?
Not if you're the only employee and own 50% or more of the issued share capital.
Can I display my EL certificate online?
Yes. Since 1 October 2008 you can display it electronically, as long as employees know where to find it and can access it.
