Tradesmen that work for themselves or operate a business will need to obtain different types of insurance to protect from possible claims that are leveraged against them. Tradesman public liability insurance and employer liability insurance are common policies obtained by businesses, and more may be added as needed.
A tradesman insurance policy can be made up of different types of insurance cover as needed. Depending on factors like the size of the business, company structure, and the kind of work that is being carried out will affect the kind of policies that should be obtained.
Making sure that tradesmen are properly insured before carrying out work can save a lot of headaches in the long run. Likewise, customers who engage professional tradesmen’s services should ensure that they are adequately covered for claims should anything go wrong.
For all types of insurance, it can be advantageous for tradesmen to shop rates from a selection of providers. Each insurer has slightly different requirements, and taking the time to investigate different policies can add up to substantial savings.
Paying for policies annually instead of monthly can often result in lower rates, and companies that offer tradesman insurance policies may have very different costs and excesses. However, insurance policies will need to be set at appropriate limits to cover the work being performed. It may be worth consulting an insurance professional to ensure that coverage is adequate.
Types of tradesman insurance
Tradesman insurance coverage can provide insurance for things like the theft of tools or equipment, personal injury or employee claims. In addition, if work is being carried out in an exposed area like a building site, insurance may be needed to cover the cost due to theft or vandalism while work is in progress.
Insurances that may be included under a tradesman insurance policy are:
- Employers liability
- Public liability
- Personal accident
- Tools and equipment
- Business vehicle
- Contract works
- Professional indemnity
Specialised policies may also be added to a tradesman policy for companies that have employees or perform skilled or high-risk building work.
Are any required by law?
There is only one insurance that must be held by law: employer’s liability insurance. In the event that tradesmen operate a business using employees of any kind, seasonal, temporary or full time, then the business must be protected against workers compensations claims.
Accidents and injuries occur with relative frequency in the workplace, with the most common being caused by slips, trips, and falls. However, damage from falling from heights or falling objects is also common, and injuries can be due to a worker’s actions or those of colleagues.
Whatever the cause of the accident, any claims will be targeted at the company. Of course, negligence or failure to provide safe working conditions will have to be proved, but successful employee claims cost businesses millions of pounds each year.
Proof of insurance may be requested from tradesmen under certain circumstances. For example, it may be required for large contracts or when working for local or government authorities. It may also be required by large construction companies that are hiring tradesmen as subcontractors for big projects.
Tradesman public liability insurance
Tradesmen that perform work in clients’ homes or at public locations will need to invest in public liability insurance. Accidents that happen in the workplace or on a building site are not always limited to employees. Sometimes a member of the public or a client can sustain an injury or damage to their property.
For claims brought against tradesmen by a third party, public liability insurance will be needed to cover the cost of the claim. While this type of insurance is not a legally required obligation, many tradesmen elect to purchase it. This is because claims can be expensive, and the monthly premium payment cost is negligible compared to a claim costing thousands of pounds.
Large companies or those that are involved in complex projects may require higher policy amounts, but the standard policy is often £2 million pounds. The average monthly cost of a public liability insurance policy can vary depending on the tradesman’s industry.
According to NimbleFins, for a £2 million policy, a carpenter’s public liability insurance cost would be £84, while a builder will have to pay around £104. However, even with the difference between industry rates, an average claim costs around £13,500, making a public liability policy a worthwhile investment for most tradesmen.
Premiums may also be affected by factors like the years the tradesman has been in business or the number of previous claims they have previously paid. The level of work experience and a clean claims record can help tradesmen achieve prime insurance rates.
Other considerations can have the opposite effect and increase the cost of monthly premiums. For example, a criminal history or past claims can increase the price. So too can working in extremely hazardous working conditions. As the risk goes up, the cost goes up.