Employers’ Liability for Landlords – When You Need It

Most landlords understand public liability, but fewer appreciate when the law requires employers’ liability (EL). If you directly employ anyone to work on your rental business, you’ll usually need EL by law. Fines for non-compliance are steep, and injury claims from workers can be financially devastating. This article explains when EL is compulsory, the grey areas with “self-employed” helpers, how EL fits alongside public liability, and the documentation insurers expect.

What Is Employers’ Liability?

Employers’ liability covers injury or illness suffered by your employees arising out of their work for you. It pays compensation and legal costs if you’re held responsible. In the UK, most businesses that employ staff must hold EL with a limit of at least £5 million (many policies provide £10 million as standard).

When Landlords Legally Need EL

You will typically need EL if you directly employ anyone in your property business, for example:

• Caretakers or building supervisors on payroll.
• Cleaners or gardeners you hire directly (not via an agency/contractor).
• Maintenance staff/handypersons who work under your control, on your schedule, with your tools.
• HMO managers or wardens employed by you rather than a managing agent.

If you’re a company (Ltd/LLP) and you pay yourself a salary, some insurers treat directors working on site as employees for EL purposes. Where in doubt, arrange EL – it’s inexpensive compared with the risk.

When You May Not Need EL

EL is usually not required if you only use bona fide contractors (separate businesses with their own insurance) or agency workers who are employed by the agency. Examples:

• You hire a cleaning company that invoices you; its staff are employed by the company.
• You appoint a managing agent who employs the block caretaker.
• You use a Gas Safe engineer or NICEIC electrician who carries their own EL and public liability.

Caution: Labelling someone “self-employed” doesn’t make it so. If they work mainly for you, follow your instructions, use your equipment, or you deduct tax/NI, a court could view them as your employee. In that case, EL is expected.

Bona Fide vs Labour-Only Subcontractors

Insurers distinguish between:

• Bona fide subcontractors (BFSC) – independent businesses with their own EL/PL, method statements and risk assessments. You should check and file copies of their certificates annually.
• Labour-only subcontractors (LOSC) – effectively part of your workforce (you direct them, supply tools/materials). These count towards your employee numbers/wage roll and should be covered by your EL.

How EL Interacts with Public Liability

Public liability (PL) covers injury or damage to third parties (tenants, visitors, neighbours). It does not cover injuries to your employees. That’s EL’s job. Many serious landlord claims arise from slips, trips or falls during maintenance – without EL, injuries to your own staff could be uninsured.

Portfolio Scenarios

• Single-let landlord using contractors only – likely no EL required, but keep contractor insurance certificates on file.
• HMO landlord employing a weekly cleaner – EL required. Add the cleaner to payroll or formalise status; include them in your wage roll declaration.
• Block owner with on-site caretaker – EL required; consider £10m limit due to increased footfall and risk.
• Ltd company where the director does repairs – many insurers insist on EL; disclose this clearly at quotation.

Common Pitfalls

• “Self-employed” in name only – control, tools and payment method might still make them an employee.
• No paperwork from contractors – failing to obtain EL/PL certificates, RAMS, and qualifications from BFSC can leave gaps.
• Under-declaring wage roll/headcount – inaccurate declarations can jeopardise claims and trigger premium adjustments.
• Relying on PL for staff injuries – PL won’t respond to employee claims.
• Not adding new helpers mid-term – tell your broker when you start employing staff or using LOSC.

Risk Management and Documentation

Insurers expect reasonable health and safety controls. Keep a simple compliance file:

• Employment records (contracts, induction notes, training).
• Risk assessments and method statements for regular tasks (ladders, cleaning chemicals, manual handling).
• Accident book and incident reporting procedure.
• Contractor vetting log – EL/PL certificates, qualifications, and renewal dates.
• Equipment maintenance – PAT tests for your kit, ladder inspections, COSHH sheets for cleaning agents.

How Much EL Cover?

Most landlords take £10m EL as standard (often packaged with PL). The marginal cost uplift from £5m to £10m is usually small, and many managing agents, freeholders and lenders mandate higher limits on larger sites.

Disclosure at Quotation/Renewal

Be explicit with your broker about:

• Number of employees (including directors doing manual work).
• Estimated wage roll split by clerical vs manual.
• Use of LOSC and BFSC, and the vetting you complete.
• Any higher-risk tasks (roof access, power tools, lone working).

Quick Decision Flow (Rule of Thumb)

1. Do you pay anyone to work on your properties on a regular basis? If yes → go to 2.
2. Are they employed by you or labour-only under your control? If yes → you very likely need EL.
3. Are they a genuine contractor company with their own insurances? If yes → retain certificates; EL may not be required for them.

Final Thoughts

Employers’ liability is simple in principle: if you employ people, insure them. The complexity lies in grey-area working arrangements. When in doubt, err on the side of arranging EL and tightening your paperwork. It’s inexpensive protection that closes one of the biggest gaps in a landlord’s risk profile.

Request your quote or call-back

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

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