Employers' liability for market traders

When you need it

GOV.UK says you must have employers' liability insurance as soon as you become an employer, and it must come from an authorised insurer. This applies to a trader who takes on a stall assistant, a seasonal worker or a regular helper on the payroll.

Who counts as an employee

An employee is someone who works under an employment contract. GOV.UK lists signs that a person is probably an employee, including these:

• They work regularly and expect to be paid for set hours.
• You control their workload and how the work is done.
• They cannot send someone else to do the job.
• You supply the tools and equipment.
• They receive paid holiday or sick pay.

If most of these do not apply, the person may be self-employed. Employment status for tax and for employment law can differ, so check both on GOV.UK if you are unsure.

Who does not need to be covered

GOV.UK lists two groups you can employ without needing the insurance: a close family member, and someone based outside England, Scotland and Wales. If you only employ people in those groups, the requirement does not apply to you.

Minimum cover and the penalty

The minimum cover is £5 million. GOV.UK gives the fine for not being properly insured as £2,500 for every day. Many insurers bundle the cover into one trader policy, so ask whether it sits alongside your public liability insurance.

Displaying the certificate

You must display your certificate where employees can read it, for example at your workplace, on your website or on an intranet, and show it to inspectors on request. GOV.UK gives a fine of £1,000 for failing to display it.

What it means on a stall

Employers' liability covers claims from your employees who are injured or become ill because of their work for you. Public liability covers members of the public. Most traders who employ staff hold both. Organisers may also ask to see the certificate, which is one of the documents listed in our guide to what event organisers ask to see.

Questions to ask your insurer

• Does the policy meet the GOV.UK minimum cover of £5 million?
• Does it cover the way my helpers actually work, including casual and seasonal staff?
• Does it cover work at events away from my usual base?
• How do I get a certificate I can display and send to organisers?

Insurers can also tell you whether a helper is likely to be treated as an employee under the policy, which saves problems if a claim is made.

If you cannot tell whether a helper is an employee, read the GOV.UK pages on employment status and ask your insurer or an adviser before the next event. Fines apply per day of being uninsured, so it is worth settling the question before you take someone on.