Switching broker · Legal requirement · 2026

Hired your first employee? You now need Employers' Liability

The moment you take on staff, one insurance stops being optional and becomes the law — with real penalties for getting it wrong.

Part of: When to switch business insurance broker

In short

Under the Employers' Liability (Compulsory Insurance) Act 1969, almost every UK business with employees must hold Employers' Liability insurance of at least £5m — most policies provide £10m as standard. The certificate must be available to your employees, and you can be fined up to £2,500 for each day you're uninsured. Taking on your first person is also the right moment to review the rest of your cover, because staff bring new risks a sole-trader policy never had to consider.

What the law requires

Who: almost all employers with staff, including many part-time and casual workers. Narrow exceptions exist (for example some genuinely family-only businesses).
How much: a legal minimum of £5m; most insurers provide £10m as standard.
The certificate: must be accessible to your employees (electronic is fine).
The penalty: up to £2,500 for any day you are without suitable cover.

What else changes when you take on staff

Your public liability exposure grows — more people, more that can go wrong.
You may need cover for tools, equipment or stock the employee uses.
It's the natural moment for a full review — many businesses are still on a policy written when they were a sole trader.
If contracts or clients are involved, they may ask for evidence of your Employers' Liability.

Whether a subcontractor counts as an "employee" for this purpose depends on the working arrangement — a broker will help you check.

Frequently asked

Do I need Employers' Liability for one part-time employee?

Almost certainly yes. The duty applies to part-time and casual staff too, not just full-time employees. There are only narrow exceptions.

What's the fine for not having Employers' Liability?

Up to 2,500 pounds for each day you are without suitable insurance, plus a possible further penalty for not making the certificate available to staff.

Do I need it for subcontractors?

It depends on whether they are genuinely self-employed or work under your control like an employee. If in doubt, insure the exposure; a broker will help you decide.

Is 5m enough?

It's the legal minimum, but most policies provide 10m as standard and some contracts ask for more. A broker sets the right level for your situation.

Taking on staff? Get it in place.

A named Apex broker will put the legally-required cover in place and review the rest of your insurance now the business has employees.

Arrange Employers' Liability → Request a callback

Apex Insurance Brokers is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not legal advice; whether Employers' Liability applies depends on your specific arrangements.