What Insurance Does a Care Home Legally Need in the UK?
Running a care home is about people first, but it is also a regulated business with serious legal responsibilities. Insurance is one of the areas where “nice to have” and “must have” get mixed up, so this guide sets out what cover a UK care home legally needs, what regulators and commissioners typically expect you to have, and how to buy insurance in a way that does not leave awkward gaps.
If you want help getting the right cover in place quickly, you can get a care home insurance quote from Aldium Insurance and speak to someone who understands the sector, not a generic call centre script.
The short version
For most care homes, the only insurance that is clearly and widely compulsory by law is:
- Employers’ liability insurance (if you employ staff)
Depending on what your care home does, you may also have other legal insurance requirements, most commonly:
- Motor insurance (if you use vehicles on the road)
Everything else is usually not strictly “mandatory by law” in the same way, but may still be effectively required by your regulator, landlord, lender, local authority, NHS commissioner, or your own contracts, and it is often essential for sensible risk management.
If you are unsure where your care home sits, Aldium Insurance can quote based on your exact model of care, staffing and premises, so you are not paying for cover you do not need, but you are protected where you do.
1) Employers’ liability insurance (the big legal must-have)
When is it required?
If your care home employs anyone, employers’ liability (EL) insurance is generally compulsory. The UK government guidance is clear: you must have EL insurance as soon as you become an employer, and it must cover you for at least £5 million from an authorised insurer.
This is rooted in the Employers’ Liability (Compulsory Insurance) Act 1969, which requires employers to insure against liability for employee injury or illness arising out of work.
Importantly for care: “employee” is not just your PAYE list in spirit. In practice, your risk can include agency staff, bank staff, trainees, volunteers, and contractors under your control. If they are effectively working like employees, the liability picture can look similar.
What does it cover?
EL insurance is there to pay compensation and legal costs if a member of staff is injured or becomes ill because of work and makes a claim. In a care home, typical scenarios include:
- Manual handling injuries
- Slips and trips
- Needlestick injuries or exposure incidents
- Stress and psychological injury claims
- Occupational illness allegations
What happens if you do not have it?
Aside from the obvious financial risk, failing to hold EL when required can lead to enforcement action and penalties. The key point is simpler: if you employ, treat EL as non-negotiable.
If you need to put EL in place or you want to check your limit and wording, get an Aldium Insurance quote and ask for a quick compliance check of your certificate and schedule.
2) Regulatory requirements that make insurance “effectively mandatory”
A lot of care home operators hear “only EL is compulsory” and stop there. The problem is that regulators can still expect evidence that you have appropriate insurance and indemnity arrangements to cover your risks, even if a specific policy type is not named as compulsory in an Act of Parliament.
England: CQC registration and financial position
CQC’s guidance on Registration Regulation 13 (Financial position) explains that providers must have the financial resources to provide services and states that the provider must have insurance and suitable indemnity arrangements to cover potential liabilities such as death or injury, property loss or damage, and other financial risks.
That does not read like “buy this exact policy”, but it does mean insurers and brokers should build a package that matches your exposures. It is one reason care home insurance should be tailored, not copied from a pub or a shop.
If you want your insurance to line up with what the regulator expects to see, Aldium Insurance can structure a quote around your statement of purpose, staffing and activities, so you have the right evidence if you are asked.
Wales, Scotland and Northern Ireland
Each nation has its own regulator and framework. The practical lesson is consistent: regulators can require you to demonstrate financial viability and appropriate arrangements. Even when a particular policy is not spelled out as compulsory, you do not want to be explaining to an inspector, commissioner, or safeguarding team why a foreseeable risk is uninsured.
3) Public liability insurance (usually not legally compulsory, but close to essential)
Public liability (PL) covers claims from third parties for injury or property damage arising from your business. In a care home that “third party” can include:
- Residents (depending on policy structure and legal approach)
- Visitors and contractors
- Members of the public on site
- Delivery drivers and trades
PL is not typically mandated by a single headline statute in the way EL is, but it is often required by contracts and is a basic expectation in a setting where people are on your premises daily.
Think about a visitor slipping in reception, or a contractor claiming your team caused damage during access. These are common claims patterns in premises-based businesses, and care homes are no exception.
If you want PL that reflects a care environment, not a generic premises risk, ask Aldium Insurance for a care home quote and request a quick walkthrough of resident, visitor and contractor exposures.
4) Treatment and professional indemnity cover
Care homes vary widely. Some are residential only. Some provide nursing. Some deliver medication management, wound care, PEG support, falls prevention plans, and more.
This is where language matters:
- Professional indemnity is generally about professional negligence causing financial loss.
- Medical or Treatment liability responds to injury or harm arising from care or treatment delivered.
The FCA’s plain-English description of professional indemnity is that it covers firms when a third party claims they suffered a loss due to professional negligence.
Is this legally mandatory for every care home? Not usually in a simple “must buy” sense. But if you provide care and especially nursing-type activities, it is difficult to argue that you can operate responsibly without appropriate indemnity. It is also frequently required by commissioners, local authority frameworks, and sometimes by CQC expectations around having suitable indemnity arrangements.
If your care home provides nursing, dementia care, complex needs or any higher-acuity support, get an Aldium Insurance quote and ask specifically about treatment liability and clinical negligence limits.
5) Buildings and contents insurance
If you own the building, buildings insurance is often required by your mortgage lender and is fundamental. If you lease, your landlord may insure the structure but require you to cover:
- Your contents and equipment
- Tenant improvements
- Your liability for damage you cause
In care homes, the value concentration can be high: specialist beds, hoists, nurse call systems, kitchen equipment, laundry equipment, IT and security systems. Buildings cover can also be more complex because of:
- Older properties
- Listed status
- Fire protection requirements and compartmentation
- High occupancy and mobility issues affecting evacuation risk
Aldium Insurance can quote with the right rebuild and contents assumptions. If you are unsure how to set sums insured, ask Aldium for a quote and a practical checklist.
6) Business interruption cover (often the difference between surviving and closing)
Business interruption (BI) is not legally required, but in care it can be critical. If you have a fire, flood, escape of water, or major incident, you may face:
- Temporary closure or partial closure
- Reduced admissions
- Extra costs of alternative accommodation and staffing
- Loss of fees
BI can cover loss of gross profit or revenue and increased cost of working, depending on the wording. For care homes, it is especially important to check:
- Indemnity period length (12, 18, 24 months)
- Denial of access and notifiable disease extensions where relevant
- Damage at nearby premises or utilities interruption
If your current insurance is “cheap and cheerful”, BI is where gaps hide. Get a quote from Aldium Insurance and ask us to stress-test your BI limits and indemnity period.
7) Residents’ personal belongings and “all risks” style cover
Residents and families rightly expect belongings to be treated with care. Policies may cover loss or damage to residents’ effects while on the premises, sometimes with options for higher limits.
While not a legal requirement, it can reduce disputes and protect your reputation. It also helps staff avoid informal “goodwill payments” that can spiral.
If you want to offer families reassurance, ask Aldium Insurance to include residents’ effects options in your quote.
8) Management Liability
Care homes are people-heavy. That means employment disputes are common: unfair dismissal, discrimination, harassment, whistleblowing allegations. Management liability cover can help with legal costs and awards, subject to terms.
Again, not legally required, but in a regulated environment where staffing decisions are scrutinised, it is worth considering.
If you employ a large team or have multiple sites, speak to Aldium Insurance for a quote that includes realistic protection for employment disputes and directors’ risks.
9) Cyber and data risks
Care homes hold sensitive personal data, including health information. A cyber incident can mean service disruption and regulatory headaches, as well as costs for recovery and notification.
Cyber insurance is not compulsory, but regulators and families expect strong data handling. Cyber cover can help with incident response services, business interruption from cyber events, and liability claims.
If you store care plans digitally, use eMAR systems, or rely on networked nurse call or CCTV systems, ask Aldium Insurance to price cyber cover alongside your main quote.
10) Vehicle insurance and transport activities
If your care home owns vehicles or uses minibuses for outings, appointments, or transfers, motor insurance is legally required for vehicles used on public roads. Also consider “non-owned vehicle” exposures where staff use their own cars on care home business. That is a common blind spot.
Not sure whether your current motor arrangements cover staff errands and resident transport? Get an Aldium Insurance quote and ask for a quick review of business use and liability.
A practical compliance checklist
Here is a sensible way to think about “legal need” versus “must have to operate safely”.
Typically legally required
- Employers’ liability insurance (if you employ staff)
- Motor insurance (if you use vehicles on public roads)
Strongly expected by regulators, commissioners, lenders, landlords, or good governance
- Public liability
- Treatment Liability / medical malpractice (especially where nursing or complex care is provided)
- Buildings (if you own) and contents
- Business interruption
- Cyber cover (increasingly important)
Often valuable add-ons in care settings
- Residents’ personal effects
- Legal expenses and employment disputes
- Fidelity / employee dishonesty
- Engineering inspection (where relevant to plant and lifting equipment)
If you want this turned into an insurance schedule that matches your exact operation, get a quote from Aldium Insurance and ask for a care home specific risk review.
Common mistakes that create nasty surprises at claim time
- Buying a generic “business package” that does not understand care activities.
- Underinsuring buildings or contents, then being hit by average clauses.
- No business interruption or a short indemnity period that does not reflect rebuild timelines.
- Treatment activities not declared properly, especially where nursing is involved.
- Agency and bank staff exposures not considered under EL arrangements.
- Multiple sites insured as if they are one location, missing site-specific fire protections and sums insured.
Aldium Insurance can quote with care home realities built in. If you have a renewal coming up or you have just taken over a home, get an Aldium quote and ask them to check for these gaps.
Getting a care home insurance quote that actually fits
When you ask for quotes, expect to discuss:
- Registration type and services provided
- Staffing levels and use of agency staff
- Claims history and incidents
- Premises details, fire protections, refurbishments
- Resident profile, including dementia care or complex needs
- Medication and clinical activities
- Any transport activities
- Turnover and fee income for BI
A broker who knows the care sector will ask the right questions and make sure the insurer understands the risk properly. That is how you avoid insurers disputing a claim because the activity was not presented clearly.