If you employ people under a contract of service or apprenticeship, you will almost always be legally required to have employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. to cover injuries or disease suffered by them as a result of their job. There are three very limited exceptions to this:

1. EmployeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. are based abroad

   If all your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or apprentices People who are taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college.are based outside Great Britain, you do not need employerA person or business hiring one or more staff members.'s liability insurance unless any of them spends 14 or more consecutive days in Great Britain in the course of their employment with you. Beware if you do have employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who are based abroad, you should check whether the relevant local law requires you to take out equivalent insurance.

2. EmployeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. are close family of the employerA person or business hiring one or more staff members.

   You do not have to insure any employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who are also the spouse, civil partner, parent, grandparent, step-parent, child, grandchild, stepchild, sibling or half-sibling of the actual employerA person or business hiring one or more staff members. (eg if you run a small family business and employ these relatives personally, rather than through a limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested.).

3. There is only one employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who owns the companyA private company limited by shares incorporated and registered in England and Wales.

   If your business is a companyA private company limited by shares incorporated and registered in England and Wales. which only employs a single person, and that person owns at least half the share capitalThe total nominal value of a company's shares. References to a company’s share capital can be read as references to all of that company’s shares. in your companyA private company limited by shares incorporated and registered in England and Wales. , you do not need employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. at all.

See Q&A 3 for full details of how much cover you need and Q&A 19 for how to find a suitable policy.

Not having proper employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. can have serious consequences for your business. See Q&A 5 for full details.

Your employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. must cover your business for at least £5 million (this can be split across more than one policy, so long as the total value of the cover is at least £5 million). Most insurers offer £10 million cover as standard out of which they pay both compensation to any qualifying staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. and accompanying legal costsFees, charges and expenses paid to lawyers for their services..

Review your risk assessmentThe process of looking at what hazards may be present when doing a certain activity, or in a certain area, and the steps which can be taken to eliminate or reduce those dangers. (see When to do a general risk assessment) and consider whether you need a higher level of cover. You can use General risk assessment for an office, General risk assessment for a shop or other business open to customers, General risk assessment for remote workers, and Pregnancy and maternity: risk assessment to help you carry out risk assessmentsThe process of looking at what hazards may be present when doing a certain activity, or in a certain area, and the steps which can be taken to eliminate or reduce those dangers. in your business.

If your business is part of a group of companiesA collection of companies under common control., the obligation to have employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. applies to the group as a whole, not to each individual companyA private company limited by shares incorporated and registered in England and Wales. within the group. You therefore only need to ensure that the group as a whole has at least £5 million in cover. See Q&A 5 for the consequences of not having enough insurance.

Your employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. provider will give you a certificate to prove that you have the proper level of insurance. You must either:

1. display a copy of this certificate in every place of business where your insured employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. work; or

2. provide the insured employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. with reasonable access to an electronic copy (eg by uploading it to your companyA private company limited by shares incorporated and registered in England and Wales. 's intranet).

It is up to you which to choose. The latter will likely be more suitable if your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. work off the premises a lot of the time. Failure to display your certificate or give your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. access to it can result in a fine of up to £1,000.

It is a criminal offence to fail to secure the proper employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work.. The penalty is a fine of up to £2,500 for every day you are uninsured.

If your business is run through a companyA private company limited by shares incorporated and registered in England and Wales. , note that it is not just the companyA private company limited by shares incorporated and registered in England and Wales. that commits and offence and can be fined. If the failure to get proper employers' liability insuranceInsurance which covers illness and injuries suffered by employees during the course of their work. is with the agreement of, or as a result of the neglect of any directorThe directors of a company are the individuals who make up the company's board of directors. Directors may be natural persons or companies, but each company must have at least one director who is a natural person. The board is the main decision-making body of the company. , manager, company secretaryGenerally, a person or another company responsible for a company's administration, arranging board and shareholder meetings, keeping proper records, filing documents at Companies House etc. Sometimes known as Head of Governance. or other officerIn a company: A legally defined term used to refer to the director, company secretary or managers of a company. Officers of a company have certain duties and responsibilities towards the company and can be held liable for company law breaches.(s) of the companyA private company limited by shares incorporated and registered in England and Wales. , they will also be guilty of the offence and can be fined as well as the companyA private company limited by shares incorporated and registered in England and Wales. . The fine for these individuals is also up to £2,500 for every day without proper insurance.

Further, if you do not take out employerA person or business hiring one or more staff members.'s liability insurance, or do not take out enough cover, the companyA private company limited by shares incorporated and registered in England and Wales. will have to pay out on any claims that your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. make for personal injury suffered at work. A successful claim against you by an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could have serious financial consequences for your business.

No. Your companyA private company limited by shares incorporated and registered in England and Wales. directorsThe directors of a company are the individuals who make up the company's board of directors. Directors may be natural persons or companies, but each company must have at least one director who is a natural person. The board is the main decision-making body of the company. , managers or other officersIn a company: A legally defined term used to refer to the directors, company secretary or managers of a company. Officers of a company have certain duties and responsibilities towards the company and can be held liable for company law breaches. cannot be held personally responsible to pay out on any employersA people or businesses hiring one or more staff members.' liability uninsured claims.

You are not legally required to have public liability insuranceInsurance which covers claims from the general public for injuries or property damage caused by a business or its staff. as a matter of course, although you may find that clients or potential clients expect you to have a minimum level of cover before they will work with you.

Give serious consideration to whether public liability insuranceInsurance which covers claims from the general public for injuries or property damage caused by a business or its staff. is right for your business, particularly if your business involves interacting with the public, for example if your premises are open to the public (a shop or a restaurant for example) or your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. interact with your customers in person, eg making deliveries to their homes. Do not forget that even if your business is not public-facing, you may well still have an element of risk that public liability insuranceInsurance which covers claims from the general public for injuries or property damage caused by a business or its staff. will mitigate eg from business contacts attending your offices for meetings, or suppliers making deliveries to your premises.

Depending on the nature of your business, you should consider obtaining product liability insuranceA form of insurance which covers the cost of compensation for injuries or other damage caused by a faulty product.. While not a universal legal requirement, if you supply, install, maintain, or manufacture any products, product liability insuranceA form of insurance which covers the cost of compensation for injuries or other damage caused by a faulty product. can insure you against claims for injury caused to a member of the public or damage to their property as a result of a faulty product.

It does not matter if you are not to blame for the faulty product, you can still potentially be held liable for it. For example, you can be held responsible to consumersPeople purchasing goods and services for personal use/acting outside of their professional or working capacity. if:

1. you made the product;

2. your business name or branding is on the product;

3. you have imported the product from outside the EUThe European Union; or

4. you do not know who manufactured the product.

It does not matter for these purposes if you sold the product or gave it away for free.

Many insurers offer product liability insuranceA form of insurance which covers the cost of compensation for injuries or other damage caused by a faulty product. as part of a business insurance package with employerA person or business hiring one or more staff members.'s liability insurance. According to the ABIAssociation of British Insurers, most businesses take out policies for between £1 million and £5 million of cover.

It is an offence to cause or permit someone to drive without third party insurance(Motor insurance) A form of motor insurance policy which provides cover against legal responsibility for injury to or death of any third party., so you must check that all staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. using their own vehicles for work-related journeys are adequately insured.

Where a staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. member uses a vehicle registered in your name, or their own vehicle for business purposes, check that the insurance covers business use (eg travelling between work locations, visiting customers, driving other staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. etc) as opposed to merely personal use. If a vehicle is used for business use but is not insured for it, the policy will usually be invalidated.

The majority of business interruption insurance policies will not cover losses incurred due to a pandemic. However, it is possible that a business interruption policy which covers losses incurred due to an outbreak of disease, or 'non-damage, denial of access', may cover losses due to the coronavirus pandemic and/or lockdowns. This will depend on the wording of the specific policy. Some policies limit their cover to specific diseases listed in the policy (which would not cover new diseases like coronavirus) and/or require the disease to actually be present at the premises to trigger a payout. Other policies only provide cover where there has been a mandatory closure of a premises.

Due to disputes between insurers and small businesses as a result of the coronavirus pandemic, the Financial Conduct AuthorityA government-established independent financial regulator, responsible for regulating conduct amongst the financial services industry. (FCAFinancial Conduct Authority. A government-established independent financial regulator, responsible for regulating conduct in the financial services industry.) took a test case against a number of insurers to clarify what types of COVID-19 losses can be claimed under business interruption insurance. In 2021, the Supreme Court held that:

1. business interruption insurance cover should usually be available if a business has been required to fully or partially close due to government orders; and

2. if a policy requires a disease to have caused loss in a certain local area or radius, businesses need only show their losses were caused by government action as a result of the wider COVID-19 pandemic (provided that at least one case of COVID-19 occurred in the local radius).

The exact cover provided by business interruption insurance will depend on the wording of your insurance policy, as some policies are more restrictive, but insurers have generally been required to take a broader interpretation of policy wording in relation to COVID-19. This means more policyholders will have valid claims under business interruption insurance and some payouts will be higher.

If you think your insurance covers you for COVID-19 losses, contact your insurer for information about the next steps for resolving your claim. If you are not satisfied with the outcome of your claim you can make a complaint to your insurer or broker, or if you are still not satisfied you can complain to the Financial Ombudsman.

Probably not. The Association of British Insurers advises that the likely cost of insurance that covers the risk posed by new diseases would be prohibitive, so it is unlikely that insurance covering businesses losses due to pandemics will become common going forward.

The ABIAssociation of British Insurers advises that it is important to keep your business insured, even if you have suspended trading or while it is closed eg due to a coronavirus lockdown. Some insurances are legally required (such as employerA person or business hiring one or more staff members.'s liability insurance and commercial motor insurance). It is also a good idea to stay covered for usual risks such as fires, floods, theft, and vandalism, especially as unoccupied premises can be at increased risk of theft or damage. Not being covered could delay your ability to get back up and running again once you are able to.

Ask your insurer how they suggest you deal with monitoring and checking on unoccupied property in circumstances where there are national restrictions on movement.

Maybe, if you get less value from your insurance cover due to the effects of a lockdown on your business. For example, a hairdresser or bar which has public liability insuranceInsurance which covers claims from the general public for injuries or property damage caused by a business or its staff. will be very unlikely to claim under the policy during a business closure, so their insurer should be considering a reduction in premiums. Insurers do not have to reassess the value of a policy if a claim is still generally possible but the likelihood of claiming has reduced (eg on a car insurance policy if car usage is reduced but hasn't stopped entirely).

Your insurer is not obliged to investigate your individual circumstances and take action on your policy, but if you believe your insurer should take action in relation to your policy, contact them to ask whether they will be reviewing the type of policy you are concerned about. Measures could include delivering benefits in a different way, providing alternative, comparable benefits, reducing premiums for the duration of the change in value, or partially refunding premiums already paid.