Any sole trader, self-employed or business will need certain types of tradesman insurance to safely, professionally, and legally operate their business. Business insurance is a cover-all or umbrella term that can include a number of different insurance policies, depending on what is needed and required.
For tradesmen who need to be protected against claims, many insurance policies are available that will shield them from claims, losses, damages, accidents, and injuries. Depending on the type of business being operated and the type of work it performs will determine which kinds of insurance should be acquired.
Insurance coverage types that may be needed by those operating as tradesmen are:
- Employers liability
- Public liability
- Personal accident
- Tools and equipment
- Business vehicle
- Contract works
- Professional indemnity
Popular kinds of tradesman insurance
Some insurances like employers liability are required by law, while others are completely optional and can be purchased as needed. All will protect tradesmen from financial liability against any claims that are brought from the public, clients, or employees, and the cost of any losses.
Each insurance policy serves a different function and may or may not be required depending on how the tradesman’s business is set up and the kind of work it performs.
For example:
A tradesman that is a sole trader with no staff or company vehicles may wish to obtain:
- Public liability insurance
- Professional indemnity
- Tools and equipment coverage
- Personal accident insurance
For a tradesman that has employees and operates a business vehicle, the following coverage types will be needed:
- Public liability insurance
- Employers liability insurance (mandatory)
- Professional indemnity
- Tools and equipment coverage
- Personal accident insurance
- Business vehicle insurance (mandatory)
- Contract works
Tradesmen who wish to operate and remain fully protected from claims will need to assess business operations and determine which insurance policies they will need to purchase and understand the type of protection each policy provides.
Public Liability Insurance
Provides protection from third-party claims and can be essential when performing work at a clients property or location. Damage and injury can occur during the course of a normal working day, and any claims or losses will need to be covered. Public liability insurance can be purchased to protect tradesmen from financial liability that will pay for settlements and legal expenses.
Employers Liability Insurance
Having staff perform work can help increase operations and revenue, but there is also the chance of being on the wrong end of a claim. Employers liability insurance is required by law to protect employers from claims brought against them by employees. These claims are for work-related illness or injury that result from performing work duties. Depending on the nature of the injury, these types of claims can demand settlements that accumulate to be thousands of pounds.
Professional Indemnity
Tradesmen can be liable if work doesn’t go as planned. If a client believes that incorrect advice has been given or that the tradesman has been negligent in his duties, then they may pursue a compensation claim. Professional indemnity shields tradesmen from this type of claim, not only for current work but for work performed in the past. Problems with materials or other components may not arise immediately, so this insurance is helpful for dealing with unanticipated issues.
Tools and equipment
Tradesmen frequently require work tools and specialised equipment to carry out work. However, there are a number of ways that losses or damage can occur, and expensive tools are not always easy to replace. Tools and equipment insurance will cover items from theft, damage, vandalism or loss. This type of cover does not just include items like saws and hammers but can extend to things like laptops or mobile phones needed to perform work.
Business vehicle
Any company vehicles used will need to be insured against accidents, theft, and damages. Risks can be heightened when driving for business due to operating a vehicle in peak periods or travelling unfamiliar roads. While it may be tempting to save money by using a vehicle with a standard or non-business car insurance policy, this will void any cover, so it’s best to invest in the correct protection.
Personal accident
There are times when due to accident or critical illness, tradesmen are unable to work. This loss of income can cause considerable stress and financial strain so that personal accident cover can be a worthwhile investment. Therefore, for any periods of illness or injury that result in a loss of income, necessary expenses will be covered under this insurance.
Contract works
As a part of business operation, tradesmen may frequently perform work at a client’s job site or off-site location. This can often take an extended period of time to complete, and issues can occur while work is in progress. In addition, contract works insurance provides protection for events such as fire or vandalism that may result in expensive repairs or reworking.