When does a sole trader need employers’ liability insurance?
Under UK law, employers’ liability insurance is generally required if you employ staff. That includes full-time employees, part-time workers, apprentices, and in many cases labour-only subcontractors.
You likely need EL if:
- You hire an apprentice
- You use casual labour regularly
- You supervise labour-only subcontractors
- You pay someone a wage to assist your work
For a full legal overview see: Employers’ Liability Insurance Explained.
Do sole traders without employees need employers’ liability?
If you genuinely have no employees, apprentices, or labour-only workers, employers’ liability may not be required. However, if your situation changes — even temporarily — you must review your cover immediately.
What about labour-only subcontractors?
This is where many sole traders get confused. If a subcontractor works under your supervision, uses your tools, and doesn’t control pricing, they may be classed as labour-only. That can trigger the need for employers’ liability insurance.
If you’re unsure, start with a quote and declare your structure clearly: Compare options here.
How much does employers’ liability cost for a sole trader?
Costs depend on:
- Payroll size
- Industry risk (e.g., office vs construction)
- Claims history
- Chosen limit (£5m or £10m)
See full breakdown here: Employers’ Liability Insurance Cost UK.
£5m vs £10m – what should sole traders choose?
£10m is commonly requested for contracts and site work. For many sole traders, the price difference between £5m and £10m can be modest, but always compare both levels before deciding.
What happens if a sole trader doesn’t have employers’ liability?
Failing to hold required employers’ liability insurance can lead to fines. Beyond penalties, an uninsured injury claim could cause serious financial strain.
Public liability vs employers’ liability for sole traders
Many sole traders confuse the two:
- Public liability covers injury/damage to members of the public.
- Employers’ liability covers injury/illness to employees or workers.
Most trades need both. Learn more here: Public Liability Insurance.
FAQs
Do sole traders legally need employers’ liability insurance?
Only if they employ staff or have labour-only workers. If you truly work alone, it may not apply.
Does an apprentice count as an employee?
Yes. Apprentices are generally classed as employees for insurance purposes.
What if I only hire someone occasionally?
Even temporary or casual help can trigger the requirement. Always check your position carefully.
Can I bundle employers’ liability with public liability?
Yes. Many sole traders bundle both covers under one policy.
CoverFinder is an independent insurance media platform. We are not FCA-regulated to provide insurance advice. We introduce businesses to FCA-authorised providers. Read our Disclaimer and Privacy Policy.