The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.

Do I need UK employers' liability insurance for an international company?

Are you an international business considering hiring workers from the UK?

One of the greatest challenges faced by international business is in understanding their obligations for buying employers' liability insurance. The costs of failing to cover your workers can be high - £2,500 for every day you are not properly covered, and £1000 for not displaying a valid certificate in your place of work. A week without the proper cover in place could cost you as much as £18,500!

But how do you know if this rule applies to you? Are there different types of employees, or exemptions for international businesses? How can you display a valid certificate if you have no UK premises?

Read on for our guide to employers’ liability for international companies.

Tables of Contents

What is employers’ liability insurance?

Employers’ liability insurance protects a business from employee claims of injury or illness caused as a result of their work.

Claims can be made against employers for repetitive strain injuries, slips, trips and falls, and equipment or role-related injuries or illnesses. Claims can be made at the time of employment, or at any time after employment (for example, with workplace illnesses that take some time to develop).

Employers liability insurance has been a legal requirement for any business with employees in the UK since the introduction of the Employers Liability (Compulsory Insurance) act of 1969.

Why is employers’ liability insurance a legal requirement in the UK?

Employers’ liability insurance is compulsory in the UK as a protective measure for both workers and businesses operating within the country. It ensures that workers sustaining or developing serious injuries or illnesses as a result of their work are able to claim compensation, but also that any business which is claimed against is able to continue to do business after the claim.

Prior to the introduction of compulsory insurance, a business without proper liability insurance in place might have to cease trading due to the legal and compensation costs of a single injury or illness [symbol:m-dash ]in some cases being unable to pay the full compensation amount. The knock-on effect of this would have negatively impacted the claimant, the business, the business’ clients and any other employees of the business.

What is the definition of an employee in the UK?

The UK definition of an employee is complex and the term ‘contract of employment’ has not been fully fleshed out in UK law, so whilst the various types of worker are explained in the ’status of workers’ guidelines on the HSE website, there will be exceptions and variations.

If you pay your workers’ national insurance and tax contributions, that person is an employee according to the HSE and you should have employers’ liability insurance in place for them.

In most other cases where you pay someone to do work for you, the UK legal system could still consider them an employee. This is why in the majority of cases it is best to attempt to secure employers’ liability whenever you hire someone in the UK. This way, even if you ultimately don’t require the insurance you will benefit from the advice of insurers and insurance brokers.

When do I not have to purchase employers’ liability for hiring UK workers?

In some cases you do not need to purchase UK employers’ liability insurance, most notably:

  • When you pay a UK-based business to carry out services for you, and your contract for services is between two limited companies/businesses.
  • When you hire freelancers or contractors who use their own equipment and have their own business premises.

If your freelance workers use your equipment, adhere to your work schedules or attend your UK premises you may still require employers’ liability for them.

A good rule of thumb is asking yourself if you could be responsible for any injury they sustain as a result of working for you. If the answer is yes, then an employers’ liability policy is a good idea.

Do I need a UK address to hire UK workers?

No, you do not explicitly need a UK address to hire workers from the UK. You can enter into a contract with UK entities (freelancers, contractors or businesses) to provide your business with goods and/or services without requiring a UK address.

You do, however, need a UK address to register with companies house, which in turn is a requirement if you need to pay UK tax and national insurance contributions.

How do I know if I need to pay UK tax and national insurance contributions?

You should consult with an accountant to determine whether you need to pay tax and national insurance contributions for your employees. This is especially important if your business is based overseas, as they will be able to advise you on the best way to proceed with hiring any UK workers and the process to follow in order to remain compliant.

Do I need to register with companies house to hire UK workers??

No, you do not need to register with companies house to have UK residents work for your business as freelancers, contractors or supplying businesses.

You do, however, need to be registered with companies house in order to pay taxes in the UK. In order to do this you would need a UK address (not a PO box, it needs to be a premises where post can be signed for on your behalf so that HMRC can communicate with you).

Quick guide to UK employers liability requirements

For reference, you should consider the following steps before attempting to hire anyone to work for you from the UK—each step will help you determine what your responsibilities are and what to do next:

  1. Decide if you need a UK resident to work for you
  2. Determine their duties and how you would like to pay them
  3. Consult with a contract solicitor to determine the legal basis of your work arrangement
  4. Consult with an accountant for advice on how best to structure your business
  5. Determine if steps 6-8 apply to you based on solicitor and accountant feedback
  6. Discuss with a UK insurer or broker to understand their terms for cover and what you would need to do/provide in order to obtain a quote for employers’ liability insurance
  7. Register as a UK business
  8. Purchase employers’ liability and other required business insurance policies

It is crucial that you consult with expert advisors such as solicitors, accountants and insurance professionals before entering into employment arrangements with UK residents, and that you fully understand your responsibilities and liabilities as a business operating within the UK.

The law in the UK does not make exceptions for ignorance, especially in cases involving personal injury or illness, so it is worth taking the time and paying the expense to ensure that you are operating legally.

Where can I buy UK employers liability insurance?

Our in-depth guide details the best ways to find insurance for businesses based outside of the UK.

The process can be difficult and you may find it necessary to restructure your arrangements with UK employees in order to adhere to insurance requirements, but the end result is peace of mind and the ability to operate in the UK whilst complying with local rules and regulations.


The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.