# Employers' liability insurance for a recruitment agency: £5 million cover, £2,500 a day if it lapses, worked

> GOV.UK says employers' liability cover must be at least £5 million, with a £2,500 fine for each uninsured day. Here is what a lapse costs an agency, day by day.

- Page to cite: https://aeolookup.com/recruitment/employers-liability-insurance-recruitment-agency-5-million-2500-a-day-lapse-worked/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Recruitment agencies, AWR, right to work and the Conduct Regulations
- Published 19 October 2026
- Key fact: At £2,500 for each uninsured day, a lapse of 14 days costs £35,000, 30 days £75,000, 90 days £225,000 and a full year of 365 days £912,500, plus £1,000 for not displaying the certificate. The £5 million minimum cover is 2,000 days of that daily fine (£5,000,000 / £2,500).
- Sources: GOV.UK, "Employers' liability insurance" (minimum cover £5 million; £2,500 for each day not properly insured; £1,000 for not displaying the certificate; cover from the moment you take on an employee; insurer must be authorised, checkable on the FCA register; exemptions for close family only and for staff based outside England, Scotland and Wales; the page says responsibilities differ for agency staff, freelancers and contractors and points to separate guidance) and HSE, "Employers' Liability (Compulsory Insurance) Act 1969: a brief guide for employers" (HSE40) landing page (employers must insure against liability for injury or disease to their employees; the full guide is a download I did not read). Read 19 October 2026.

A recruitment agency is an employer twice over. It has its own consultants and back office on payroll, and it often has temps on payroll too. The policy renewal sits in someone's diary, and the question is what happens if the diary entry is missed. The GOV.UK page gives a daily figure that is easy to work out.

## What GOV.UK says

The GOV.UK page on employers' liability insurance says:

- You need cover of at least **£5 million**.
- You can be fined **£2,500 for each day** you are not properly insured.
- You can be fined **£1,000** if you do not display the certificate, and it must be accessible to employees (at the workplace or on an intranet) and shown to inspectors on request.
- You need it **from the moment you take on an employee**, with an insurer authorised by the FCA, which you can check on the FCA register.
- The page lists exemptions where the only staff are close family, or where staff are based outside England, Scotland and Wales.

The HSE page I read says employers are required to insure against liability for injury or disease to their employees arising from their work. It did not give the amounts.

## The sums

The fine is a daily one, so a lapse is days times £2,500.

| Gap in cover | Working | Fine at the daily figure |
|---|---|---|
| 1 day | 1 x £2,500 | £2,500 |
| 14 days | 14 x £2,500 | **£35,000** |
| 30 days | 30 x £2,500 | **£75,000** |
| 90 days | 90 x £2,500 | **£225,000** |
| 365 days | 365 x £2,500 | **£912,500** |

Add £1,000 if the certificate is also not displayed. A 14-day lapse with no certificate on show would then come to £36,000.

The £5 million minimum is itself 2,000 days of the daily fine (£5,000,000 / £2,500), a way of seeing how large the cover is next to the penalty. The GOV.UK page I read gives £2,500 as the daily fine, and I did not read whether that is a maximum. I have treated it as the figure to plan with.

## What it means for an agency

- **Treat the renewal date as a deadline.** Put it on the same list as the right to work and licence dates in your [compliance readiness check](https://aeolookup.com/recruitment/recruitment-agency-compliance-readiness-check/).
- **Count it in the start-up costs.** An agency that puts a first consultant on payroll needs the cover from that day: see the [UK legal checklist for starting a recruitment agency](https://aeolookup.com/recruitment/how-to-start-a-recruitment-agency-uk-legal-checklist/).
- **Know the temp question before you answer a client.** Whether the agency's policy or the client's responds for a temp injured on site depends on who the employer is and on the policy wording. The GOV.UK page says responsibilities differ for agency staff and refers to separate guidance, which I could not open. Ask the insurer in writing.
- **Keep the margin in mind.** The cost of insurance is one of the employer costs that sits behind a charge rate: see the [temp margin calculator](https://aeolookup.com/recruitment/temp-margin-calculator-charge-rate-employer-costs/).

## What I did not read

I did not read the Act, the full HSE40 guide, the GOV.UK guidance for agency staff and contractors (the address I tried returned an error), how long certificates should be kept, whether penalties are maximums or fixed, or any insurer's policy wording. Nothing here tells you whose cover applies to a particular temp. The figures are the ones on the GOV.UK page on 19 October 2026.

Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) builds AI staff who join your agency team and keep the insurance renewal dates, check each certificate is displayed and on file, and warn the office manager weeks before a policy ends, with a person confirming the renewal is in place.

This is general information, not legal or insurance advice. Check the GOV.UK page, HSE guidance and your insurer for your own agency.

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General information for UK small firms, not legal, tax or financial advice.