Do I have to have public liability insurance as a self-employed tradesperson? What the law requires and what it does not

No. No law makes a self-employed tradesperson hold public liability insurance, and the Health and Safety Executive's guide for employers calls it "generally voluntary". The policy the law does require is employers' liability: at least £5 million of cover from the day you become an employer, with a fine of up to £2,500 for every day you go without.

This page covers England, Scotland and Wales, where the 1969 Act applies.

Two policies, two different people

Public liability pays claims made against you by members of the public or other businesses: the customer whose ceiling you bring down, the neighbour whose car your ladder lands on. It does not cover claims by your own employees.

Employers' liability pays compensation to an employee who is injured or made ill by the work they do for you. The Employers' Liability (Compulsory Insurance) Act 1969 makes it compulsory, and the 1998 Regulations set the minimum at £5 million. The HSE says most insurers offer at least £10 million.

Who has to hold employers' liability

Two rows need a note. The family exemption covers a husband, wife, civil partner, parent, grandparent, child, grandchild, brother or sister, and the step and half versions of those. The HSE's guide says it does not apply to a family business that is a limited company. So a sole trader whose son works for him is exempt, and the same two people trading as a limited company are not.

The duty covers anyone you employ under a contract of service or apprenticeship. An apprentice counts from the first day.

The subcontractor question

This is the row that catches trades firms. The HSE's guide says it does not matter whether you call someone an employee or self-employed, or what their tax status is. What matters is the real relationship and how much control you have over the work. It adds that someone who is self-employed for tax purposes may still be classed as an employee for other reasons.

So paying someone under CIS does not settle it. Our CIS checklist for contractors deals with the tax side; the insurance side turns on these signs.

You may need cover for someone where:

• you control where and when they work and how they do it
• you supply their materials and equipment
• they cannot send a substitute if they are unable to do the work
• they do the same work under the same conditions as your employees

You may not need it where:

• they do not work only for you
• they supply most of the equipment and materials for the job
• they are clearly in business for themselves
• they can send a substitute

A bricklayer with his own gang, tools and other customers sits in the second list. A labourer who turns up each morning to be told where to go, using your kit, sits in the first. If you are unsure, the HSE's advice is to take legal advice.

What a missed month costs

GOV.UK says you can be fined £2,500 every day you are not properly insured. The HSE's guide words it as up to £2,500 for any day without suitable insurance, so treat the figure as a maximum.

A firm takes on its first labourer on Thursday 1 October 2026. The owner gets round to the insurance at the end of the month, and cover starts on Sunday 1 November 2026.

• Uninsured days: 1 to 31 October, 31 days
• Maximum fine: 31 × £2,500 = £77,500

You must also display the certificate where employees can read it, or make it available to them electronically, and show it to an inspector who asks. Failing to do that can mean a fine of up to £1,000. And if the labourer is hurt in that month, there is no insurer behind the firm when the claim arrives.

The insurer has to be authorised. GOV.UK points to the Financial Conduct Authority's register to check.

If you are about to take someone on, the insurance is one of several costs. Our guide to statutory sick pay from day one covers another.

Who asks for public liability anyway

The law does not. Other people do.

• Schemes. NICEIC's joining page says a business must have public liability insurance of at least £2 million and, where appropriate, professional indemnity or employers' liability cover. Our guide to what a trades firm's registrations cost has the scheme fees we could read.
• Main contractors and commercial clients. They set a figure in the contract or the tender. Ask for it before you price the job.

We could not confirm from their own pages what the lead sites require, so check the terms of any you join.

Why most trades carry it

If a joint you made fails and floods a kitchen, the customer's claim is against you, and without insurance you pay it yourself. Under section 5 of the Limitation Act 1980 a claim founded on a contract can be brought for six years in England and Wales, so the risk does not end when the invoice is paid. Our guide to how long to keep invoices and job records explains what to keep for that period.

Your terms cannot remove the risk either. A term that excludes liability to a householder for work not done with reasonable care and skill is not binding, as our terms and conditions template sets out.

When you buy, check three things: the limit matches what your schemes and clients ask for, the policy lists every kind of work you do, and it covers anyone working under your direction. We have not given premiums, because insurers quote each firm and publish no price list.

This is general information, not legal or insurance advice. For a firm whose workers sit between the two lists above, speak to a broker or a solicitor before the next job starts.