Getting the right insurance can be a tricky task for tradespeople. Every trade involves some high-risk activity, and therefore, finding the correct cover for you, at an affordable price, can be a challenge.
Despite this challenge, securing a comprehensive insurance policy should be a top priority for any tradesperson. When uninsured, a single incident can be enough to financially cripple your business. With the right cover, though, you can help to keep yourself on track. There are a number of key types of insurance that you should consider taking out as a tradesperson, including:
1. Public liability insurance
Public liability insurance is perhaps the most important insurance type for tradespeople and, indeed, for businesses of every type. It covers you against claims made by members of the public arising from injury or damage resulting from a mistake you make.
Claims of this sort can be financially devastating and, with the growth of no win no fee legal services, the number of incidents that result in legal action has grown steadily. A single slip can close a business – but properly tailored public liability cover can help to ensure that you remain financially stable.
It’s also important to note that some clients may only do business with tradespeople who have sufficient public liability cover. This is particularly common in the public sector. Therefore, you may wish to check with potential clients before you decide on the level of cover you take out.
2. Employers’ liability insurance
If you employ anyone, you’re legally obliged to take out employers’ liability insurance. This type of cover protects you against claims made by employees, trainees, or subcontractors arising from injury or illness suffered as a direct result of their work.
Employers must currently be insured to a minimum level of £5 million, although you might choose to take out insurance to a higher level. You must display your certificate of employers’ liability insurance in a location where your employees have reasonable access to it. Employers who fail to take out employers’ liability insurance could receive very significant fines.
3. Tools and equipment insurance
Tools and equipment are many tradespeople’s most important assets, so it’s vital that you protect them properly. You might well have acquired your tools over the course of several years, meaning that the cost has been spread out – but imagine what it would cost to replace them if you lost them all in one go.
Good tools and equipment cover will pay out in the event of theft or damage beyond repair. However, you should make sure that you read your policy documents carefully as there may be some exclusions. Some insurers, for example, do not cover tools when left in a van overnight.
In addition to these ‘core’ covers, there’s a range of other insurance types that you might find necessary. For example, contract works cover protects your projects and the materials used against theft or damage. In addition, legal expenses cover can help pay your legal bills in the event of a dispute.
The simplest and most cost-effective solution is generally to combine all of the applicable covers into a single policy. This means that you have a single renewal date, and that your policy documents are all in one place. You can compare quotes quickly and easily using an online insurance comparator such as Simply Business.