Employers' liability insurance pays compensation when someone who works for you is injured or made ill by that work and claims against your business, and for most UK employers it is compulsory rather than optional. Contractors meet it the hard way: a housing provider's portal wants a certificate before you can quote, and what is employers liability insurance stops being an abstract question and becomes a gate between you and paid work. Below is the legal trigger, the cover levels UK buyers ask for, and when you do not need it.
What is employers' liability insurance, and how it differs from public liability
Employers' liability (EL) covers claims from your own workers. Public liability covers claims from everyone else: the tenant whose ceiling came down, the neighbour's car, the letting agent who tripped over your extension lead. HSE's guide to the Employers' Liability (Compulsory Insurance) Act 1969 puts it bluntly: public liability insurance is generally voluntary, employers' liability insurance is compulsory.
The statutory minimum is £5 million of cover from an authorised insurer. Two details matter before buying the cheapest quote going. That £5 million includes legal costs, and HSE notes most insurers offer at least £10 million as standard, which is why £10 million certificates are so common on site. You must display the certificate where employees can read it, and since October 2008 an electronic copy is fine if people know where to find it.
The legal trigger: employees and labour-only subcontractors
Most people asking what is employers liability insurance want the answer to one thing: does it apply to me? You need cover for anyone you employ under a contract of service or apprenticeship, and HSE is explicit that the label does not decide it: "It does not matter whether you usually call someone an employee or self-employed or what their tax status is."
In plain terms, employees and labour-only subcontractors count as employees for EL purposes, while bona fide subcontractors generally do not.
HSE's indicators point one way or the other. You probably need cover for someone where:
- you deduct income tax and National Insurance from what you pay them
- you control where and when they work, and how they do it
- you supply their materials and equipment
- you have a right to the profit on their work
- they cannot send a substitute when they are unable to turn up
- they work under the same conditions as people you already employ
Where the opposite holds, and they work for others, bring their own tools and can send a substitute, you probably do not.
Being inside the Construction Industry Scheme settles nothing. CIS is a tax mechanism, and HSE is clear that someone self-employed for tax purposes can still be an employee for other reasons. A groundworker you pay a day rate, in your van, using your mixer, who cannot send a substitute, is labour-only whatever the deduction statement says.
Enforcement is real: you can be fined up to £2,500 for any day without suitable insurance, and up to £1,000 for failing to display the certificate.
Do you need it? A decision table
| Your setup | Employers' liability insurance? |
|---|---|
| Sole trader working alone, no workers at all | Not legally required |
| Sole trader paying a mate a day rate, using your van and tools | Yes, that is labour-only |
| Limited company, sole director-shareholder, no other staff | Exempt under the owner-employee rule |
| Limited company, two director-shareholders, no other staff | Not exempt, the rule covers a company employing only its owner |
| Unincorporated family firm employing only close relatives | Exempt, but lost the moment you incorporate |
| Any firm with an apprentice | Yes, apprenticeship contracts are named in the Act |
| Firm using genuine subbies with own tools, insurance and substitution right | Generally no EL duty, but keep evidence |
| Firm using CIS subcontractors on a labour-only basis | Yes |
If you are exempt, expect to prove it. Some buyers accept a signed declaration that you employ nobody. Others will not complete onboarding with a blank insurance field, and explaining rarely beats form validation.
How much cover UK buyers actually ask for
We maintain a requirements set covering registration gates for UK work sources. At least 57 of the 557 UK work sources we tracked as of September 2026 name employers' liability in their onboarding requirements. The sweep ran in July 2026 and the count was recomputed for this piece.
The shape of those 57 is the useful part. Roughly a fifth are principal contractors and maintenance or FM firms, another fifth are accreditation schemes and trade bodies, and the rest split across council portals, housing providers and ALMOs, NHS bodies, universities and frameworks.
What they point to on cover level:
| EL cover level the source points to | Number of sources |
|---|---|
| No level fixed at registration, set later per tender | 15 |
| £5 million, the statutory floor | 9 |
| £5 million rising to £10 million with lot value | 4 |
| £10 million | 4 |
| £1 million, one trade body | 1 |
| Required only where you employ people | 4 |
| Named in document or accreditation requirements, no level | 20 |
The caveat matters more than the table. Only seven of those 57 published an actual figure on a page we could read without logging in. The rest set it per tender, keep it behind the portal login, or record it as an expectation rather than a published rule. That is why £10 million is the pragmatic answer for anyone chasing social housing and public sector repairs, even though what is employers liability insurance law demands is £5 million. Contractors comparing notes in communities like Contractor Club report the same.
What it costs to get past the gates that check your certificate
The policy is priced by your insurer on trade, payroll and claims history, so we do not quote premiums. The predictable cost is the accreditation layer that checks your certificate. Checked on 14 September 2026, CHAS publishes contractor membership from about £429 a year at Standard, about £659 at Advanced and about £949 at Elite, scaling with organisation size, on its pricing page.
Our July 2026 audit of operator pricing found the cheapest SSIP-style schemes starting in the low hundreds a year for sole traders and micro firms, mid-tier memberships clustering in the £400 to £700 range, and the top tiers used for Common Assessment Standard running into four figures. Treat those as ranges, not quotes: pricing drifts and only firms up once you enter your headcount.
Getting the certificate accepted first time
- Check your insurer is authorised, and that the name on the certificate matches the legal entity registered on the portal rather than your trading name.
- Diary the renewal a month out. Expired certificates are a routine automatic fail on vetting portals.
- Display a copy where staff can read it, or share the electronic version and tell people where it lives.
- Keep expired certificates. There is no legal duty to retain them, but industrial disease claims surface decades later and a missing certificate means the cost lands on you.
- Keep evidence for every bona fide subcontractor: their own certificate, tools and invoices. That file supports your position if a worker's status is challenged.
That paper trail has resale value. Firms that eventually sell are valued partly on clean, documented compliance, as anyone who has been through it with a broker like Contractor Exit will confirm.
Where PlanaJob fits
If you employ anyone, or use labour-only subbies, sort the certificate first, then get in front of buyers who check it once rather than on every job. Platforms like PlanaJob let property managers compare quotes from vetted contractors, so your documents are verified at onboarding. Already hold £5 million or £10 million cover? Create a contractor account and quote on live jobs from property managers and letting agents near you. Still working out what is employers liability insurance will mean for your firm before you take anyone on? The PlanaJob blog covers the rest of the pack.
This is general information on UK compliance, not insurance or legal advice. Status under the 1969 Act turns on the facts of each working relationship and only a court can decide it authoritatively. Check HSE's guidance and take advice if you are unsure.
Employers' liability questions contractors keep asking
Do I need employers' liability insurance as a sole trader with no staff?
No. If you genuinely work alone and employ nobody, the Act does not apply. The catch is commercial rather than legal: many buyer portals will not onboard you without a certificate, and you still need public liability cover.
Does a CIS subcontractor count as an employee for EL purposes?
It depends on the working relationship, not the tax scheme. A labour-only CIS subcontractor who uses your equipment, works when you say and cannot send a substitute usually counts as an employee. A bona fide subcontractor with their own business, tools and insurance does not.
A client wants £10 million cover but I only hold £5 million. What now?
Ask your broker for a mid-term adjustment before declining the work. Raising the indemnity limit from £5 million to £10 million is a routine change and often costs less than contractors expect, because the vast majority of claims never approach the lower limit.