A sole trader working entirely alone does not need employers' liability insurance. The difficulty is that the word alone is doing more work than it looks, and several ordinary arrangements put a sole trader inside the duty without anybody intending it.
The duty is triggered by employing a person
The compulsory insurance legislation applies to employers, and the test is whether somebody is employed rather than how many hours they work or what they are called. A sole trader who takes on a part time assistant, a Saturday helper, an apprentice or a labourer for a fortnight is employing. There is no threshold below which it does not apply, which is the point most often assumed to exist.
Casual, cash and family help
Paying somebody cash for a day is employment for this purpose. Family members working in the business can be inside the duty too, and the exemption that exists for family arrangements is narrower than the folklore suggests, so it is worth reading the current guidance rather than relying on what a neighbour said. Volunteers and work experience placements are the cases most worth checking, because the answer depends on the arrangement rather than on whether money changed hands.
Labour only subcontractors are usually inside it
A subcontractor who works under your direction, with your materials and to your instructions behaves like an employee in claims terms, and insurers treat them that way. A bona fide subcontractor running their own business with their own insurance does not, and the evidence for that is their certificate. This is the single largest source of unexpected employers' liability premium for sole traders in the trades, and it is decided at audit rather than at quotation.
What a sole trader with nobody else needs instead
With genuinely nobody working for the business, the honest answer is that employers' liability is not required. What remains is public liability, which clients and contracts will demand, tools cover if the kit is the means of earning, professional indemnity where advice is sold, and something answering for the sole trader's own injury, since no employer's policy will. That last one is a personal accident or income protection question rather than a business liability one.
Questions people ask about do sole traders need employers liability insurance
Does a sole trader with no staff need employers' liability?
No. The duty is triggered by employing somebody, and a sole trader working genuinely alone is outside it.
Does paying a helper cash count as employing them?
Yes, for this purpose. There is no hours or pay threshold, and casual and family arrangements can fall inside the duty, so check the current guidance.
Do subcontractors count?
Labour only subcontractors working under your direction usually do. Bona fide subcontractors with their own insurance do not, and you need their certificates to prove it.