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Do you need employers liability insurance for self employed staff
Insurance 101

Do you need employers’ liability insurance for self employed staff?

In the UK employers’ liability insurance is a legal requirement for most businesses that employ staff. That can also apply if a business uses self-employed individuals.

The Employers' Liability (Compulsory Insurance) Act 1969 dictates that employers must have employers liability insurance. This act has been introduced to protect employees in case they suffer injury or illness while at work.

Many business owners make a mistake thinking the definition of an employee is a permanent member of staff on the payroll. Who is considered an employee by the Act is in fact much wider and can include self-employed workers.

When do I need employers liability insurance for self employed workers?

Let’s look at the distinction between employees and self-employed individuals first. The former is quite easy to identify but self-employed workers can be engaged in a number of different ways by a business.


An employee is someone who has a contract with you. In the contract their role, responsibilities and pay are clearly defined. The contract usually states the work hours, obligations, holiday allowance and any other employee benefits. 

In other words an employee works under your control and direction and you are contractually obliged to provide them with regular work and pay them a salary.

Even if your staff is part time or temporary, you need employers’ liability insurance.

Self employed workers

Self-employed individuals by definition work for themselves. They may deliver their services as a sole trader or via a limited company. That means they invoice you for either the work done or hours/days of work.

You as their client may define the project timescales but the self-employed worker doesn’t work under your control and you are not obliged to provide any more work.

The contract between you is about the piece of work - be it fixing the roof, developing a website or distributing promotional leaflets. The self-employed worker will carry out the work in their own time, usually using their own recourses (office, workshop, business equipment, etc.).

In this situation you do not need employers’ liability. Your relationship is business to business.

So when do I need employers' liability for self employed staff?

Sometimes a self-employed worker may enter into a contract with you which places them in your control. 

That means that they are required to work certain hours, certain days a week, possibly wear your business’s uniform, and generally represent your business as an employee. 

Some might argue that they are still carrying out this work as a sole trader or a limited company. That doesn’t matter. If you treat and expect a self-employed person to act as an employee then, as far as employers’ liability is concerned, they are an employee.

What about volunteers and apprentices?

What’s been said about self-employed workers applies to any other staff, even if you don’t pay them. 

If anyone comes to your place of work and works under your supervision and control, it is your obligation to protect them. Employers liability insurance is one of those obligations.

In conclusion

The status of self employed workers are surrounded by grey areas. Take the recent attempt of a Deliveroo driver trying to prove he was an employee in order to get compensation for a dismissal. It was more of an employee vs contractor case but it showed that the distinction of who is or isn’t an employee aren’t always obvious.

Therefore if you are not certain whether a person in your business falls inside The Employers' Liability (Compulsory Insurance) Act, sometimes it is better to arrange the insurance to be on the safe side.

If a self-employed worker in your control suffered an injury or developed an illness while working for your business, the repercussions could be very costly without the safety net of employer’s liability insurance.

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