The complete guide to tradesman insurance
Whether you’re a carpenter, a plumber or a window cleaner, you’ll need specialist insurance cover to protect you, your customers and your livelihood.
Tradesman insurance is a policy that has been designed to cover the risks that you may face while performing your trade from day to day. But with so many different types of jobs being carried out by skilled tradesmen and women up and down the country, how do you know what cover you need?
Thankfully, the hard work has been done for you. A tradesman insurance policy is made up of core and optional covers so that you can build the right protection for you.
As a tradesman, an insurance policy is an essential part of your toolbox and should be valued as highly as any of the other tools of your trade.
What is tradesmen insurance?
Personal accident cover
Contracts works' cover
What is tradesman insurance?
Tradesman insurance is an umbrella term used to describe a range of covers that are necessary to protect many different trades. To qualify for tradesman insurance, you must be over the age of 18 and considered to be a professional in your field.
The list of different types of tradespeople that benefit from this kind of insurance is extensive. Trades such as builders, electricians, plumbers, carpenters, painters, gardeners, window cleaners and many, many more. Each of these trades is hazardous in their own way but all share exposure to core risks.
This complete guide to tradesman insurance will help you understand the covers that are included and why you might need them to protect your business.
As a tradesman, your tools are your bread and butter. Without them, you wouldn’t be able to work. And if your tools are damaged, lost or stolen, you can lose out on more than just a day’s pay. Having to let customers down can affect the reputation that you’ve earned through hard work and commitment to your business. You also have to cover the expense of replacing or repairing your tools which can have a massive impact on your cash flow.
Tradesman insurance policies provide the crucial cover your tools need as standard. Being able to claim and receive the much-needed funds to replace expensive power and hand tools is invaluable.
Remember, when you’re buying insurance for your tools, you should give as accurate a valuation as possible for the cost of replacing your treasured toolbox. If you undervalue the cost of your tools, the amount you receive when you claim may be significantly reduced.
Also, if you rely on other gadgets and business equipment to run your business, you can also cover these too. Insuring essential items such as computers, laptops, tablets and mobile phones should not be overlooked if they play a crucial part in the running of your business.
Having tool cover in place gives you peace of mind that you’ll be able to go about your business much sooner than if you didn’t have the right insurance in place. What’s more, your reputation as a reliable tradesman will remain intact. Unlike to cost of your tools, you can’t put a price on that.
Being a tradesman is a risky business and accidents can and do happen. Even the most careful of tradesmen are not immune to something going wrong in the workplace. After all, you’re surrounded by dangers. From heavy machinery and treacherous tools to hazardous materials and unsafe work environments – there are many risks that you, your employees and your customers are exposed to.
But what happens if the unimaginable does take place? It’s often difficult to think about the well-being of those around you being affected by your work. As a tradesman, it's better to hope for the best while being prepared for the worst.
Here are the answers to some common questions that you may well be asking about public liability insurance:
Do I need public liability insurance?
If there’s even the smallest possibility that a member of the public could be harmed by your work or the materials you use, then the answer is yes.
Public liability insurance is designed to cover your legal liability to pay compensation to members of the public if they’re injured, or their property or belongings are damaged, as a result of your business.
Remarkably, public liability is not a legal requirement, but as a tradesman, it’s recommended that you have this fundamental cover in place. You may even find that potential customers demand that you have some level of public liability cover before they’ll even consider putting work your way.
How much does public liability insurance cost?
There’s no fixed price for public liability insurance as the cost of your policy will be influenced by many factors. These include:
- Turnover – This is a good indication of how busy your business is. High turnover often means lots of customers which increases the likelihood of someone getting injured.
- Type of work – When it comes to insurance, not all trades are treated equally. If your job includes activities that insurers class as ‘high risk’ then you can expect to pay a higher premium.
- Location – This is less likely to affect the price you pay, but if you live in an area with high crime rates, then you may find that your premium is slightly increased to cover your tools and equipment.
- Claims history – Having made a previous claim may affect the cost of your insurance as it can suggest that your business is exposed to risks. However, all previous claims are considered on an individual basis, and it does not always result in inflated premiums.
Can't I save my money and deal with a public liability claim if it ever happens?
You could, but it's not advised. Public liability claims can be very expensive, and it would be almost impossible to guess how much you would need to save to be prepared. It’s almost always going to cost more than your insurance premiums would be though.
Most insurers offer between £1 million and £10 million of public liability insurance. You’ll need to decide which level of cover suits your needs based on what type of work you do and the amount of compensation that could be claimed if something goes wrong.
Remember that public liability claims tend to be significant because they cover expenses such as loss of income and medical costs, as well as funding the legal fees associated with defending a claim.
Without appropriate public liability insurance in place, you would be responsible for these costs. This could have a significant impact on your business, and your ability to trade.
As well as protecting your tools and your customers, tradesman insurance also provides an option to include employers' liability if you have any staff working for you. As soon as you become an employer, you have a responsibility for the health and safety of your employees. This is why the law requires employers' liability for almost all businesses who have staff.
What is employers’ liability insurance?
Employers’ liability insurance is important for the protection of both you and your employees. It protects your business if employees (including you if you’re an employee in your own business) claims compensation for illness or injury that they believe has been caused by their work.
Employers’ liability insurance will cover the significant legal fees and compensation costs, rather than you personally.
How do I know if I need employers’ liability insurance?
The Employers’ Liability (Compulsory Insurance) Act 1969 mandates that most employers must get employers’ liability insurance as soon as they hire people to work for them. It doesn’t matter if your staff work on a casual or temporary basis, or even if they work from their own home. If you’re responsible for their actions and you control when, where and how they work, then you need employers’ liability.
There are some exclusions, however. Examples of businesses that don’t need employers’ liability include:
- Small family run businesses in which all the employees are close family members.
- Businesses who employ staff who work abroad (the law in the country of the employee’s residence should be checked as a different type of insurance may be required).
- A business that only employs the owner (and they own more than 50% of the business).
- Most public organisations, such as local authorities and health trusts which are financed through public funds.
But these are the exception rather than the rule. If you employ people, the chances are that you’ll need employers’ liability insurance.
Personal accident cover
Personal accident cover provides you with a lump sum pay-out if you or any of your employees have an injury or dies because of an accident. And you’re not just covered while you’re in the workplace. You’ll be eligible for compensation even if the accident happens outside of work.
As well as covering injury and loss of life, personal accident will also consider the cost of income lost and medical fees. Of course, most policies have a maximum limit to the amount that can be claimed, but this figure tends to be tens of thousands of pounds.
It's up to you whether you choose to add personal accident cover to your tradesman insurance policy, but if you work in a risky environment, then it's a safety net that well worth having in place. It could mean the difference between your business staying afloat or going under if you’re injured and unable to work.
Contract works’ cover
Mother nature can be cruel, and she can strike when you least expect it. Including when you’re in the middle of a project that you’ve been working on for a long time.
'Contract works’ cover is intended for tradesmen to contribute towards the cost of repairing or rebuilding work that’s damaged as a result of an insured event. So, if a building that you’re working on is damaged by a fire, flood, storm, vandalism or theft, then your ‘contract works’ cover would step in to pay for the repairs.
Although the damage to part of the building you were working on would be covered, you could not claim for the rest of the existing structure to be repaired too. You would also have to foot the bill for the extra labour and time that it would take to complete the job.
Sound like this is the right insurance for you?
Find out more about buying insurance for tradesman. You can get a quick and easy quote online. Within minutes you’ll be able to choose between quotes from a panel of leading insurers so that you can make sure the cover fits your needs and the price suits your pocket.
Remember, the consequences of not having the right insurance in place can be serious to the running of your business. In the worst case you could find yourself:
- Unable to run your business
- Dealing with severe financial losses, or even bankruptcy
- Facing legal action, without the means to cover legal fees and compensation pay-outs
- Lacking the tools and business equipment which are crucial to your trade
- Coping with the stress of losing your business
- Having to pay hefty fines for failing to have insurance in place that’s required by law.
Buying tradesman insurance is so simple. Don’t let not having it be the reason that you lose the business you’ve worked so hard to build.