Employers’ liability insurance protects you if a member of staff is injured or becomes ill because of the work they do for you. It steps in to cover compensation and legal costs, which could otherwise be eye-watering.

As soon as you hire an employee, the law requires you to have this insurance. It must provide at least £5 million cover and come from an authorised insurer. This ensures your workers are protected and your business is covered if something goes wrong.

Whether it’s a construction worker injured on a scaffolding site or a personal trainer injured by faulty gym equipment, this cover helps pay for claims and legal fees. Even after someone leaves, a claim can pop up years later, so having the right cover from day one helps you stay protected long after the shift ends.

This type of insurance is only for employees, so it does not apply to members of the public or clients. Public liability insurance covers those situations instead.

You do not legally need it if you only employ close family members. Likewise, it is not a legal requirement if you only employ people working outside of the UK - but you should check on the laws in countries where they do work.

It does not cover claims related to discrimination, harassment or unfair dismissal. Anything unrelated to normal work duties, such as personal disputes or non-work-related injuries, also typically sits outside the policy.

If you employ anyone at all, even part-time or for a one-off job, you almost certainly need employers’ liability insurance. For most businesses, it’s a legal requirement from the moment the first employee starts.

There are only a couple of exceptions. You do not need it if the only people you employ are close family members, or if your workers are based entirely outside of the UK. Everyone else? You need cover for them.

The penalties for getting this wrong can be steep. You can be fined up to £2,500 for every day you should have cover but don’t, so it’s worth sorting it properly.