From 1 October 2026, right-to-work rules in the UK reach further into certain construction supply chains. That matters to main contractors and developers who rely on subcontractors, labour-only arrangements or several tiers of labour supply. A business may face a civil penalty for illegal working further down the chain even if it did not hire the individual directly.
The change is primarily a compliance and supply-chain issue, not a new insurance policy benefit. But it can have serious implications for your insurance arrangements, especially where your business depends on subcontractors or site workers whose employment status and checks are not clearly documented.
In practice, the direct employer or labour supplier remains responsible for carrying out the required right-to-work checks. Upstream businesses need to understand when extended liability could apply, and what contractual and operational steps may help them establish a statutory excuse. This is not blanket liability for every client buying construction work: the facts and contractual structure matter.
The Building report on the new right-to-work regime highlights why construction firms need to look beyond their immediate contractors. For Essex, Kent and London businesses, I think the sensible response is to map the labour chain and review the insurance wording before the next worker arrives on site.
Why insurance needs to be part of the review
The reform does not mean a standard liability policy will pay a right-to-work penalty. Civil penalties and regulatory fines are often excluded from insurance, and deliberate or knowing breaches may create further problems. Do not assume that your General Contractor Liability Insurance or employers’ liability cover will meet a penalty or resolve a compliance failure.
The insurance question is broader: could the way you engage and supervise labour affect your liability for an injury, a claim from a subcontractor’s worker, or your ability to meet a contract? And do your policy terms require you to vet subcontractors or notify insurers about how you use labour?
A certificate showing a limit is not the whole answer. The policy wording, endorsements, business description and the facts of a claim all matter. Here are five checks to make now.
1. Check who is treated as an employee for employers’ liability
Employers’ liability (EL) insurance is generally required if you employ people in the UK. The usual minimum cover is £5 million, although many policies provide a higher limit. See the GOV.UK employers’ liability guidance for the general requirement and exceptions.
Construction businesses should not assume that calling someone a subcontractor settles their status. Labour-only subcontractors, casual workers and others who work under your direction may need closer consideration. The contract label is only one part of the picture.
Review your EL schedule and wording with your broker. Ask how the policy responds to injury claims involving labour-only subcontractors and whether the people you use have been accurately disclosed. Also check that your limit meets the requirements of your main contracts. If the work or labour arrangements have changed since renewal, tell your insurer rather than relying on last year’s description.
2. Look closely at subcontractor and supply-chain clauses
Some policies set conditions for using subcontractors. These can include checking their insurance, obtaining certificates, keeping records or making sure that subcontractors follow specified safety requirements. If you do not meet a condition, it could complicate a claim.
The new right-to-work regime makes the wider chain more important too. For certain arrangements entered into on or after 1 October 2026, upstream businesses may need appropriate written contractual terms and practical controls to support a statutory excuse. Those controls can include right-to-work check requirements, restrictions on unauthorised onward subcontracting, audit rights and steps to confirm that the worker on site is the person who was checked.
That is a legal compliance issue, not a substitute for insurance. Still, check whether your policy requires subcontractor vetting and whether the contract obligations you have accepted match your actual procedures. Where you use sub-subcontractors, find out who is responsible for passing requirements down and keeping evidence.
3. Confirm your liability limits and exclusions
A new statutory penalty may be outside the scope of ordinary liability insurance, but your wider exposure can include allegations that you failed to manage a site properly or took inadequate care in selecting or supervising a subcontractor. Whether a policy responds depends on its terms and the circumstances.
Review your public liability and employers’ liability limits against your contracts and the scale of the sites you work on. Check for exclusions or endorsements affecting subcontractors, labour-only workers, action-over claims or injury claims brought by a subcontractor’s employee against a main contractor. These terms vary between policies, so ask your broker to explain the wording that applies to your own cover.
Also check how defence costs are treated. They may be handled differently depending on the policy and type of claim. If your business has accepted broad contractual indemnities, compare those obligations with the insurance protection available. A policy limit does not automatically insure every promise made in a contract.
4. Check your worker identity and site-access process
A written clause alone may not be enough to demonstrate that compliance controls are working. Businesses in scope should be able to show how workers are checked, how records are kept and how they make sure the person on site is the person who was checked.
A practical site process might include checking identity against an access pass, recording attendance and updating records when workers change. The Home Office employer’s guide to right-to-work checks explains the relevant checking process. If the arrangements are complex, get legal advice on how the regime applies to your contracts and supply chain.
From an insurance perspective, consistency matters. If your policy or contract requires you to vet workers or subcontractors, make sure the people managing site access understand what evidence to collect and where to keep it. A process that exists only in a policy manual is much harder to demonstrate than one followed on each job.
5. Tell your broker what has changed
Insurers price risks using the information they receive. If your business has expanded its use of labour-only subcontractors, begun using recruitment platforms, taken on larger projects or added another tier of subcontracting, that may be relevant to your insurance arrangements.
Make sure your broker has an accurate picture of:
- The types of workers and subcontractors you use.
- Who engages and pays each worker, and whether further subcontracting is allowed.
- Your site-access, identity-check and record-keeping procedures.
- The work you carry out, your turnover and the size of your projects.
- The insurance requirements and indemnities in your main contracts.
This is particularly important when arranging Construction Contractor Insurance. Your cover should reflect how the business operates now, not just the way it was described at the last renewal. Moyak’s guide to construction contractor insurance and general contractor liability insurance explains why the policy label is less important than the cover, limits and conditions.
What to do before the next subcontractor starts
Start by mapping the labour chain on each active project. Identify who is the direct employer or labour supplier, where workers are supplied through subcontractors, and whether the relevant contracts were entered into on or after 1 October 2026. Then check that the right-to-work procedures and contract terms suit those arrangements.
At the same time, review your EL and public liability policy schedules, relevant exclusions and subcontractor conditions. Keep evidence of checks and site controls, and ask your broker to confirm what your insurance does and does not cover. If you are unsure whether a contractual structure is within scope, seek legal advice; insurance cannot replace a proper compliance process.
For contractors looking for Business Insurance Essex, Kent or London, this is a useful moment to review more than the premium. The new rules do not automatically make every main contractor liable, and a liability policy should not be mistaken for protection against a right-to-work penalty. But where your business relies on layered subcontracting, the compliance and insurance questions are now closely linked.
Moyak Insurance Services takes an individual approach to reviewing contractors’ cover and can help you compare your policy with your work and contractual requirements. Call 01375 392087, email info@moyakinsurance.co.uk or visit www.moyakinsurance.org.uk to discuss your insurance review.