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Insurance and Licenses

Employers' liability insurance

You must get Employers’ Liability (EL) insurance as soon as you become an employer - your policy must cover you for at least £5 million and come from an authorised insurer.

EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.

You may not need EL insurance if you only employ a family member or someone who is based abroad.

You can be fined £2,500 every day you are not properly insured.

You can also be fined £1,000 if you do not display your EL certificate or refuse to make it available to inspectors when they ask.

Check to see if your insurer is authorised by looking at the Financial Conduct Authority register or contact the Financial Conduct Authority.

You may want to use an insurance broker to help you buy EL.

Product liability and safety law

If your business supplies products to consumers, you need to make sure the products are safe.

The heaviest responsibility falls on producers, eg the manufacturer of a product. But distributors - such as shops and wholesalers - also have legal responsibilities.

Failing to meet your responsibilities can have serious consequences. You could face legal action with possible fines or even imprisonment. You could also be sued by anyone who has been injured or has suffered damage to personal property as a result of using your product.

Your responsibilities as a producer, distributor or seller

By law, products sold to consumers must be safe.

The main responsibility falls on producers, manufacturers and importers to ensure that products are safe by:

  • warning consumers about potential risks
  • providing information to help consumers understand the risks
  • monitoring the safety of products
  • taking action if a safety problem is found

You need to take an active approach to preventing safety problems, otherwise you risk being sued, fined or imprisoned.

Particular care should be taken with high-risk products such as toys, fireworks, food and medicines. You should also be aware of the specific regulations which apply to such products. Read safety leaflets on the Trading Standards Institute (TSI) website.

You can read more about product safety liability and liability consequences here.

License Finder

You can use the governments license finder tool to find any other licenses you may require.

Business Companion 

Business Companion can offer free, impartial legal advice for businesses. For more information click here.


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