How Much Does Employers’ Liability Insurance Cost for Tradesmen?
Published figures put employers’ liability at roughly £60 a year for a single office worker and around £750 a year for five trade employees. The price is driven by your wageroll and the risk of the work each person does, not by a flat charge per head.
The day you take anyone on, employers’ liability insurance stops being optional. It is the one trade cover that carries a criminal penalty for going without.
That makes the price question a budgeting question rather than a buying decision. This guide sets out what the published numbers say and what sits behind them.
Employers’ liability is priced on your wageroll and the risk of the work your team does, not on a flat rate per person, so a labourer and a roofer on the same wage will not cost the same to insure. You must hold at least £5 million of cover once you take anyone on, apprentices included, and going without risks a fine of up to £2,500 for every day you are exposed. Check your claims record before renewal, since it moves the rate as much as your trade does.
Compare employers’ liability quotes before you take anyone on to the payroll.
- What does employers' liability cover cost a trade business?
- Why is employers' liability priced on wageroll rather than headcount?
- How much cover do you legally have to buy?
- Which workers count towards the premium?
- How does your trade change the rate you are charged?
- What does it cost to get employers' liability wrong?
- Does your claims record change what you pay at renewal?
- What should you check before comparing quotes?
- Frequently asked questions (FAQs)
What does employers’ liability cover cost a trade business?
Swoopfunding puts the range at about £60 a year for one office worker rising to about £750 a year for five trade employees. Trade work sits at the top of that spread because the injuries are worse when they happen.
What the published figures show
The gap between those two figures is mostly risk rather than headcount. Five people on scaffolds and roofs is a different exposure from one person at a desk.
Treat both ends as reference points rather than a quote. No insurer publishes a national average for trade employers’ liability, and anyone presenting one has usually built it themselves.
The office-worker figure is useful mainly as a floor. It shows what the section costs when almost none of the wageroll is exposed to site risk.
What a bundled trade policy shows
Money.co.uk publishes a worked quote of £12.22 a month for a three-employee business on £100,000 turnover, carrying £2 million of public liability alongside £10 million of employers’ liability. That is the combined trade package rather than the employers’ liability section on its own.
| Published example | Cover | Figure | Source |
| One office worker | Employers’ liability | About £60 a year | swoopfunding |
| Five trade employees | Employers’ liability | About £750 a year | swoopfunding |
| 3 employees, £100,000 turnover | £10m employers’ liability plus £2m public liability | £12.22 a month | money.co.uk tradesman quotes |
Why is employers’ liability priced on wageroll rather than headcount?
Because wages are the best available measure of how much work is being done and how exposed each person is. Insurers apply a rate to your declared wageroll, banded by the type of work.
A rate applied to what you pay out
Wageroll captures hours, seniority and how much of the year someone actually worked. Headcount captures none of that.
The rate itself comes from injury claims data for the work being done. A carpenter fitting second fix is rated differently from a labourer on a demolition site.
Why two firms with three staff pay differently
Split your wageroll by activity and the difference appears immediately. An office administrator, a site labourer and a working director are three different rates on the same policy.
A landscaping firm and a general builder with identical payrolls will not be quoted the same figure, because the claims behind each trade look nothing alike.
How much cover do you legally have to buy?
The statutory minimum is £5 million, set by the Employers’ Liability (Compulsory Insurance) Act 1969. Most insurers issue £10 million as standard, which is a market convention rather than a legal requirement.
The £5 million statutory minimum
The duty comes from the 1969 Act and applies from the first employee, including apprentices and part-time staff.
Government guidance confirms the £5 million floor. Anything quoted below it is not a compliant policy, whatever the price looks like.
Why insurers issue £10 million
Serious injury claims involving lifetime care can run well past £5 million. Insurers price the extra layer cheaply because it is so rarely reached.
That is why the standard offer is double the legal floor. You will seldom save real money by asking for the minimum instead.
Main contractors and public sector clients often ask to see the certificate before you start. A £10 million limit clears almost every requirement you will meet on site.
Which workers count towards the premium?
Anyone working under your direction usually counts, including apprentices, casual help and labour-only subcontractors. Genuinely independent subcontractors with their own cover generally do not.
Apprentices, casual help and family
An apprentice is an employee in law, whatever they are paid. So is a relative on the books of a limited company, because the family exemption does not reach limited companies.
The narrow exemptions cover unincorporated family businesses employing only close relatives, and a sole employee who owns half or more of the share capital. HSE guidance sets out both.
Labour-only against bona fide subcontractors
A subcontractor who turns up with your materials, works your hours and follows your method is treated as an employee for insurance purposes. Getting that wrong is the most common way a trade business ends up uninsured, and the line between employers’ and public liability is where it gets drawn.
| Who is on site | Counts as an employee? | Goes into declared wageroll? |
| Apprentice | Yes, regardless of age or pay | Yes |
| Casual or part-time worker | Yes | Yes, at what they were actually paid |
| Labour-only subcontractor | Usually yes, if you direct the work | Yes, usually as labour cost |
| Bona fide subcontractor with own insurance | Usually no | No, but keep evidence of their cover |
| Relative in an unincorporated family firm | Exempt in narrow circumstances | Check before relying on it |
| Sole employee owning 50% or more of shares | Exempt | No |
How does your trade change the rate you are charged?
The rate applied to your wageroll rises with the severity of the injuries your work can cause. Height, heat, power tools and heavy plant all push it upwards.
Where the trades sit
Roofing, scaffolding and tree work sit at the top of the banding. Fitting-out trades and bench work sit lower, and SimplyQuote’s tradesman cost guide shows the same spread across whole policies, from £200 a year for decorators to £1,800 for scaffolders.
Registration matters as well as trade. A gas engineer working outside the register is generally uninsurable for that work rather than simply expensive.
Declared activities and working height
Insurers usually ask for a maximum working height and rate against it. Exceeding the stated height puts the job outside the terms you were quoted on.
The same applies to hot works, excavation and demolition. A builder who adds structural alterations to a maintenance business has changed the rate as well as the workload.
What does it cost to get employers’ liability wrong?
Trading without cover carries a penalty of £2,500 for every day you are uninsured. Failing to display or produce the certificate carries a further £1,000.
The daily penalty
The £2,500 is per day, not per offence, so a short lapse becomes expensive very quickly. It also sits alongside the compensation you would be funding yourself.
An uninsured injury claim from a member of your own crew has no ceiling. That is the exposure the penalty is designed to prevent.
Cover cannot be backdated either, so buying a policy after the incident does nothing for it. The gap stays a gap for as long as the claim takes to arrive.
The certificate you have to show
The certificate must state the minimum level of cover provided and the companies covered by it. Electronic display has been allowed since October 2008.
The old 40-year retention rule ended on 1 October 2008 and keeping historic certificates is now advisory. It still matters for long-tail illness claims that surface decades later.
| Obligation | What the rule says | Penalty |
| Hold cover | From the first employee, under the 1969 Act | £2,500 for each uninsured day |
| Minimum limit | £5 million, with £10 million the market standard | A policy below the floor is not compliant |
| Display or produce the certificate | On paper or electronically since October 2008 | £1,000 |
| Certificate content | Must state the minimum cover and the companies covered | Part of the display duty |
| Keeping old certificates | The 40-year rule ended on 1 October 2008 | Advisory only, but useful for disease claims |
Does your claims record change what you pay at renewal?
It does, and injury claims carry more weight than most. Insurers typically look back three to five years and price on what they find.
The lookback window
A claim inside the window raises the rate applied to your whole wageroll, not just the section it arose from. Once it drops out, the effect fades.
Enforcement action is read the same way. It behaves much like the claims history behind public liability pricing, though the injury figures are larger.
Long-tail illness claims
Employers’ liability answers illness as well as injury, and the illness may only appear years after the exposure. Deafness, dermatitis and respiratory disease are the usual examples.
The policy in force when the exposure happened is the one that responds. That is why old certificates are still worth keeping even though the retention rule ended.
A claim like that can land long after the employee has moved on and the business has changed shape. Insurers price for that tail, which is part of why employers’ liability costs what it does.
What should you check before comparing quotes?
Get the wageroll split right, decide whether you are buying the section standalone or inside a trade package, and read what the certificate will say. Those three things explain most price differences between quotes.
Getting the wageroll split right
Declare each person against the work they actually do. Putting an administrator into a site band is a quiet way of overpaying all year.
Under-declaring works the other way and is worse. Insurers reconcile the figure at renewal or at the point of a claim.
Most trade policies are written on an estimated wageroll and adjusted afterwards. Keep the payroll records that back your declaration, because that is what the adjustment is worked from.
Standalone or inside a trade package
Most trades buy employers’ liability inside a tradesman policy alongside public liability and tools, which is usually cheaper than assembling it separately.
Compare the whole package price rather than the section price. Even a sole trader who currently only needs public liability should check what adding a first employee would do to the total.
Frequently Asked Questions (FAQs)
Yes, from the day you employ anyone, under the Employers’ Liability (Compulsory Insurance) Act 1969. The penalty for trading without it is £2,500 for every uninsured day.
Swoopfunding puts a single office worker at roughly £60 a year, with trade roles costing more. Your own figure depends on the wages you pay and the work that person does.
Wages measure how much work is being done and by whom, which headcount does not. Insurers apply a rate to the wageroll you declare, banded by activity.
Yes. Apprentices are employees in law regardless of age or pay, so the duty applies from their first day.
Labour-only subcontractors working under your direction usually do. A bona fide subcontractor with their own tools, methods and insurance usually does not.
It meets the legal minimum. Most insurers issue £10 million as standard because serious injury claims can run beyond the statutory floor.
You may be, if you are the sole employee and own 50% or more of the share capital. Check the position carefully before going without cover.
You must display it or make it available to employees, and electronic display has been permitted since October 2008. Failing to display or produce it carries a £1,000 penalty.
The 40-year retention rule ended on 1 October 2008, so keeping them is now advisory. It is still worth doing, because illness claims can arrive decades after the exposure.
Usually, because the insurer prices one risk instead of two. Money.co.uk publishes a three-employee example at £12.22 a month for both sections together.