Written by Michael Foote, Insurance Expert
A new apprentice joins your plumbing business for two days a week. A labourer helps with a bathroom refit. You bring in a mate to hold pipework on a large commercial job. Each arrangement can change your insurance responsibilities. So, do plumbers need employers liability insurance? If you employ anyone, the answer is usually yes.
Employers’ liability insurance is designed to protect your business if an employee becomes ill or injured because of their work and makes a compensation claim. For plumbers, that could involve anything from an injury while lifting a boiler to illness caused by exposure to hazardous substances, or an accident on a client’s site.
The key issue is not whether you call someone a helper, apprentice, casual worker or subcontractor. It is the reality of the working relationship.
When do plumbers need employers’ liability insurance?
In most cases, UK plumbing businesses must hold employers’ liability cover as soon as they employ staff. This includes full-time and part-time employees, apprentices, trainees, temporary workers and many casual labourers. The legal requirement comes from the Employers’ Liability (Compulsory Insurance) Act 1969.
The policy must provide at least £5 million of cover, although many insurers offer £10 million as standard. You must also make your certificate available to employees, either by displaying it at the workplace or providing electronic access where staff can reasonably see it.
For a busy plumbing firm, this cover is not simply a box-ticking exercise. Work often involves manual handling, hot works, power tools, confined spaces, ladders and work in occupied homes or construction sites. Even with good training and sensible site procedures, accidents can happen. A successful claim without insurance could place serious pressure on a small business.
Failing to have compulsory cover can lead to a fine of up to £2,500 for every day you are uninsured. There can also be a fine of up to £1,000 for not making the insurance certificate available. Those are avoidable costs, particularly when suitable cover can be arranged as part of a wider trades insurance policy.
Who counts as an employee in a plumbing business?
This is where many sole traders and small firms need to look beyond job titles. Someone may count as an employee for employers’ liability purposes if you control how, when and where they work, provide their tools or materials, pay them regularly, or expect them to carry out work personally.
For example, a plumber who hires a labourer every Friday, tells them which jobs to attend and supplies the equipment may well have an employee relationship, even if the labourer submits invoices. Calling someone self-employed does not automatically remove the need for cover.
A genuinely independent subcontractor is different. They may quote for their own work, decide how to carry it out, use their own tools, work for several businesses and be able to send a replacement. In that situation, they would usually arrange their own insurance. However, the line is not always clear, and getting it wrong can be costly.
If you regularly use subcontractors, consider the practical facts of each arrangement rather than relying on a standard contract. Keep records of their business details and insurance, and ask whether they employ anyone themselves. If there is uncertainty, specialist advice can help you choose cover that reflects the way your business actually operates.
What if you are a sole trader?
A sole trader working completely alone does not normally need employers’ liability insurance. There is no employee to insure. But the position changes as soon as you take on an apprentice, a labourer, an admin assistant or another person who works under your direction.
There are limited exemptions. For instance, a business employing only close family members may be exempt if it is not incorporated as a limited company. Certain companies with only one employee who owns 50% or more of the share capital can also be exempt. These rules are specific, so do not assume an exemption applies just because your business is family-run or you are the only director.
A limited company is a separate legal entity from its director. That can make the position less straightforward than it is for a sole trader. Check your status carefully before deciding you do not need cover.
Employers’ liability versus public liability for plumbers
Employers’ liability and public liability insurance deal with different risks. A plumbing business with employees may need both.
Employers’ liability protects you against claims from people who work for you. Public liability insurance is intended for claims from third parties, such as clients, tenants or members of the public, if your work causes injury or property damage.
For example, if an apprentice injures their back while moving a heavy radiator, employers’ liability may respond. If a customer slips on a wet floor after a pipe leak during your work, public liability may be relevant. If faulty installation causes damage months later, you may also need to consider products liability or cover for the specific contractual obligations you take on.
The right mix depends on the plumbing work you undertake. Domestic repairs, commercial maintenance, bathroom installations, heating work and larger construction projects can carry different contractual requirements and risk levels. Some principal contractors will ask to see evidence of both employers’ and public liability insurance before allowing you onto site.
How much employers’ liability cover should a plumber buy?
The legal minimum is £5 million, but this should be the starting point rather than the only consideration. Many plumbing firms choose £10 million because it is commonly available and may be required by contracts, local authorities or principal contractors.
The more useful question is whether the policy matches your workforce and working practices. Tell the insurer about the number of employees, the type of plumbing work, whether you use apprentices or labour-only subcontractors, and where projects are carried out. A policy priced for a self-employed domestic plumber may not be suitable for a firm with several installers working on commercial sites.
Do not be tempted to understate payroll, staff numbers or the nature of your work to reduce the premium. Insurance is there to respond when a problem arises. Inaccurate information can create complications when you need to make a claim.
What to check before comparing policies
Price matters, but the cheapest quote is not always the most appropriate one. Before buying, check that the insurer has correctly recorded your trade, employee numbers and work activities. Review the indemnity limit, excesses, exclusions and any conditions around hazardous work or particular types of premises.
It is also worth checking whether the policy covers your usual mix of workers. If you use apprentices, agency staff, temporary labour or labour-only subcontractors, make this clear from the outset. You should also consider whether public liability, tools cover, contract works cover or legal expenses insurance are relevant to your business, rather than assuming one policy includes everything.
Keep your details up to date throughout the policy year. Taking on a new employee, moving into commercial contracts or expanding the services you offer can all affect the cover you need. Updating an insurer early is generally far simpler than discovering a gap after an incident.
For plumbers, employers’ liability insurance is often a legal requirement and always a practical safeguard when other people work in your business. Take a few minutes to describe your workforce accurately when comparing policies. An impartial comparison service such as Quote Goat can help you focus on suitable options, so you can spend less time decoding insurance and more time running the jobs that keep your business moving.
