Do I need employers' liability insurance for all the people who work for me?

• Employers' liability
• Employers' liability - does the law apply to me?

You are only required by law to have employers’ liability insurance for people who you employ. However, people who you normally think of as self-employed may be considered as your employees for the purposes of employers’ liability insurance.

Whether or not you need employers’ liability insurance for someone who works for you depends on the terms of your contract with them. This contract can be spoken, written or implied. It does not matter whether you usually call someone an employee or self-employed or what their tax status is. Whether you choose to call your contract a contract of employment of a contract for services is largely irrelevant. What matters is the real nature of your relationship with the people who work for you and the degree of control you have over the work they do.

There are no hard and fast rules about who counts as your employee for the purposes of employers’ liability insurance. The following paragraphs may help give you some indication. However, if you have any doubts you should seek legal advice.

In general, you may need employers’ liability insurance for someone who works for you if:

• You deduct national insurance and income tax from the money you pay them
• You have the right to control where and when they work and how they do it
• You supply most materials and equipment
• You have a right to any profit your workers make although you may choose to share this with them through commission, performance pay or shares in the company. Similarly, you will be responsible for any losses
• You require that person to deliver the service and they cannot employ a substitute if they are unable to do the work
• They are treated in the same way as other employees, for example, if they do the same work under the same conditions as someone you employ.

In general, you may not need employers’ liability insurance for people who work with you if:

• They do not work exclusively for you (for example, if they operate as an independent contractor)
• They supply most of the equipment and materials they need to do the job
• They are clearly in business for personal benefit
• They can employ a substitute when they are unable to do the work themselves
• You do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers’ liability insurance to cover them

In most cases you will not need employers’ liability insurance for volunteers. Although, in general the law may not require you to have insurance for:

• Students who work for you unpaid
• People who are not employed, but taking part in a youth or adult training programme; or:
• A school student on a work experience programme

It is advisable to inform your insurance company if you take on:

• Volunteers
• Students who work for you unpaid
• People who are not employed but are taking part in youth or adult training programmes; or:
• School children on work experience programmes

You may require insurance cover for any of the above and should bear in mind the level of risk they may be exposed to during the time they are working for you. It may be necessary for you to carry out a separate risk assessment or take special measures for those listed above.

Health and Safety Executive 2006