What Is Employers’ Liability Insurance for Tradesmen?

What does an employers’ liability policy actually pay?

It pays the damages awarded to an injured employee, that employee’s legal costs and your own defence costs, up to the limit shown on your certificate.

The three bills a claim creates

A workplace injury claim arrives as three separate costs, not one. There is the compensation itself, the claimant solicitor’s bill and the cost of defending you.

Defence costs run whether or not the claim succeeds. A claim you eventually beat can still cost five figures to see off.

The accidents that trigger it on site

Falls from height, cuts from cutting equipment, crush injuries and burns make up most trade claims. A plasterer who slips off a hop-up and breaks a wrist is a textbook example.

The claim does not need a court hearing to cost you money. Most are settled between solicitors, and your insurer runs that process on your behalf.

Why the policy pays even when you were at fault

Employers’ liability answers your legal liability, which means it responds precisely because you got something wrong. Negligence is the trigger, not an exclusion.

That is the point of compulsory cover. Parliament wanted injured workers paid whether or not the employer still had money in the bank.

How do industrial disease and long-tail claims work?

Some employee claims arrive decades after the exposure that caused them. Hearing loss, dust disease and hand-arm vibration all surface long after the job was finished and invoiced.

Why the claim lands years later

Occupational illness builds slowly. Respiratory disease from silica dust or asbestos can take twenty or thirty years to show up on a scan.

A bricklayer who cut blocks dry in the 1990s may only be diagnosed now. The employer he worked for then is the one the claim is aimed at.

Which year’s policy responds

Employers’ liability is written on an occurrence basis, so the policy in force when the injury or exposure happened is the one that answers. That is the opposite of professional indemnity.

It means a business that has changed insurer five times may need to trace a policy from a company that no longer trades. Tracing services exist for exactly this problem.

What that means for your paperwork

Old certificates are the fastest way to prove who was on risk in a given year. They are worth keeping even though the law no longer says you must.

How much employers’ liability cover do you actually get?

The statutory floor is £5 million. Most trade insurers issue £10 million as standard, which is a market convention rather than anything the law demands.

The £5 million statutory floor

The Employers’ Liability (Compulsory Insurance) Act 1969 sets the duty, and the regulations under it fix the minimum at £5 million for any one claim.

Government guidance on employers’ liability insurance states the same figure. Anyone quoting £6 million has copied it from a competitor rather than the source.

Why £10 million became the default

Insurers price the extra £5 million at very little because catastrophic claims are rare. Nearly every trade package therefore issues £10 million without being asked.

A single serious head or spinal injury can exhaust £5 million once lifetime care is costed. That is why the higher limit sits alongside £10 million public liability on larger contracts.

How the limit is applied

The employers’ liability limit applies to any one claim rather than to the year as a whole. Two claims in the same period each get the full limit.

Check whether your defence costs sit inside or outside that figure. Wordings differ, and the difference matters on a large claim.

What does the employers’ liability certificate have to show?

The certificate has to state the minimum level of cover provided and the companies covered by it. You must display it where your employees can read it.

Displaying it on site and on screen

A paper copy on the office wall or in the site cabin is fine. Since October 2008 an electronic copy counts too, as long as staff know where it is and can get to it.

HSE guidance in HSE40 sets out the display rules and the narrow list of exemptions. It is the document inspectors work from.

Do you have to keep old certificates for 40 years?

No, and this is the single most repeated error in trade insurance content. The legal requirement to keep expired certificates for 40 years ended on 1 October 2008.

HSE now advises keeping them rather than requiring it, because disease claims surface decades later. Advisory is a different thing from compulsory, and plenty of competing guides still get this wrong.

The £1,000 certificate penalty

Failing to display the certificate or produce it when an inspector asks carries a penalty of up to £1,000. That is separate from the penalty for having no policy at all.

Keep a copy in the van as well as on the wall. Main contractors often ask to see it at the gate before they let you start.

Where does employers’ liability stop and public liability start?

Employers’ liability answers claims from the people who work for you. Public liability answers claims from everyone else, including clients, neighbours and passers-by.

One accident, two policies

Picture a stepladder left across a hallway. If the homeowner trips over it, that is a public liability claim.

If your apprentice trips over the same ladder, it is an employers’ liability claim. Public liability cover will not touch it, whatever the limit says.

Why trades assume one covers the other

The two are usually sold in the same package, on the same schedule, under the same renewal date. That packaging makes them look like one product.

They are priced separately and they answer to different laws. Only one of them carries a daily penalty for going without.

How does the policy describe the people it covers?

Cover follows the policy wording rather than the job title on an invoice. Most trade wordings stretch the definition of employee well past the people on your payroll.

The wording does the work

A standard trade wording usually names employees under a contract of service, apprentices, labour-only subcontractors, work experience students and hired-in labour.

Read that definition before you assume someone falls outside it. It is broader than most tradesmen expect, and it is the part insurers argue about.

Getting labour-only subcontractors on the schedule

A labour-only subcontractor turns up with a pair of hands and works to your method. A gas engineer who brings his own van, tools, certification and insurance does not.

Declare labour-only numbers separately at quote stage. Insurers rate them differently from salaried staff, and an undeclared crew is the classic reason a claim gets argued.

Declaring headcount honestly

Wage roll and headcount drive the premium, so both are declared at inception and checked at renewal. Some policies adjust the premium once the real figures are known.

Understating either is a false declaration rather than a saving. It gives the insurer grounds to reduce or contest a settlement later.

What sits outside an employers’ liability policy?

It does not cover your own injuries, damage to property, or anyone genuinely running their own business. It is a liability policy for staff injury and illness, nothing wider.

Your own injuries are not covered

As the employer you are not your own employee. If you fall off a roof, no employers’ liability policy in the country pays you a penny.

Personal accident cover or income protection is what fills that gap. It sits as an optional section on most trade packages rather than being included by default.

Genuinely self-employed subcontractors

A bona fide subcontractor carries his own liability cover and answers for his own work. His injury is his insurer’s problem, not yours.

Ask for the certificate before the job starts. A scaffolder who cannot produce one has just become your exposure.

Conditions the insurer can enforce against you

Regulation 2 of the Employers’ Liability (Compulsory Insurance) Regulations 1998 voids a defined set of prohibited conditions. Examples include a condition letting the insurer refuse because you failed to take reasonable care or breached safety law.

The injured employee gets paid, but under regulation 2(3) the insurer can recover that money from you afterwards. There is no motor-style direct-action guarantee here.

Ignoring risk assessments or training conditions is therefore expensive rather than free. Treat every condition in the wording as one you will be asked about later.

What does employers’ liability cost a trade business?

Published figures put employers’ liability at roughly £60 a year for a single low-risk worker and around £750 a year for five trade employees.

What the published quotes show

Swoop Funding publishes that £60 to £750 range across headcount and trade risk. It is a range, not an average, and where you land depends mostly on what your people actually do.

Money.co.uk publishes a worked quote of £12.22 a month for a three-employee business on £100,000 turnover carrying £2 million public liability and £10 million employers’ liability. For a wider view, how much tradesman insurance costs in the UK breaks the whole package down.

What moves your premium

Trade risk does most of the work, followed by wage roll and claims history. Roofing, scaffolding and demolition sit at the top of every rating table.

Documented training, method statements and a clean claims record all pull the number down. So does buying employers’ liability inside a package rather than on its own.