The construction and trade industry is one of the highest risk areas in the U.K. with injuries and even death occurring on a regular basis. So, how would you cope if an accident were to happen and a claim was made against you? Do you have the right insurance?
Regardless of what trade you specialize in, investing in the right insurance cover could protect you and your business, which is important for the future of your business as well as your personal reputation in your occupation. Having cover in place means you can concentrate on providing great service and results for your customers and clients instead of worrying about the potentially detrimental financial implications of a claim being made against you.
This guide will take a look at the different policies available for tradespeople to establish which policy is best for you and your business:
Public Liability Insurance
What is Public Liability Insurance?
Public Liability insurance is often considered as one of the most essential forms of cover for Tradespeople. Given the high risks associated with the construction industry, public liability insurance provides businesses with protection against property damage and injury compensation claims made by third parties.
If you have public liability cover and someone claims you, the policy can assist with handling the claim and paying the compensation and legal fees incurred.
Examples of when public liability insurance is needed:
- If you’re a decorator and you accidentally spill paint on a customer’s furniture, they can claim the cost of the damage from your public liability policy.
- If you’re using a ladder to fix the roof of a building and the ladder falls and crushes a nearby car, the car owner can make a claim against you from your public liability policy.
Is Public Liability Insurance Compulsory?
While public liability is not legally compulsory for businesses in the U.K., it is regarded as essential within the construction industry given the range of risks that could occur.
Public liability is advisable for businesses that regularly come in contact with members of the public or their property.
Employers’ Liability Insurance
What is Employers’ Liability Insurance?
Employers’ liability is cover designed to protect business owners if an employee decides to make a claim against them. If you’re a Tradesman and have staff working for you, even if they are apprentices, you will need Employers’ Liability Insurance by law.
Should an employee suffer an injury or illness sustained through their work for you, they can make a claim against you for negligence. Most policies cover current employees and previous employees.
If one of your employees or apprentices makes a claim against you, employers’ liability cover can assist with handling the claim, as well as pay the compensation and legal fees associated with the claim.
Examples of when employers’ liability is needed:
- If an employee or apprentice is electrocuted while working for you and they allege they have not been adequately trained to use the equipment responsible for the injury, they could make a claim against you.
- If an employee or apprentice contracts a respiratory disease due to working with hazardous materials and alleges the relevant personal protection equipment was not supplied, they could make a claim against you.
Is Employers’ Liability Insurance Compulsory?
Employers’ liability is compulsory in the U.K. for any business that employs staff. If you are self-employed and do not have any employees working for you, you do not need to have employers’ liability insurance, but may still want to consider Professional Indemnity and Public Liability Insurance.
Professional Indemnity Insurance
What is Professional Indemnity Insurance?
Professional Indemnity insurance is designed to provide business owners with financial protection against third party claims. If your business offers professional advice or design services that your customers or clients depend on, professional indemnity insurance could protect you if a claim is made against you.
By taking out professional indemnity insurance, if a claim is made against you, the policy can assist with handling the claim and paying compensation and legal fees owed to the claimant.
Examples of when professional indemnity is needed:
- If you’re a construction project manager that advises your client to make significant changes to a property that results in them suffering a financial loss, they could make a claim against you.
- If you’re a builder that makes a mistake which results in your client suffering a financial loss, they could make a claim against you.
Is Professional Indemnity Insurance Compulsory?
Certain financial professions, such as accountants, cannot legally operate without professional indemnity insurance. Professions that are part of a trade association may also be required to have a professional indemnity policy in place as a condition of their membership.
As a Tradesperson, you may want to seriously consider professional indemnity insurance in the event of providing a negligent service to your customers and clients which results in them making a claim against you.
Why is Van Insurance important?
As a Tradesperson, you rely upon a van to get you from A to B, store your essential tools and carry out jobs. A van could be considered as your most important tool and should something happen to your van, you may be prevented from getting to jobs and carrying out work for customers – resulting in a lack of income.
Just like private motor insurance, it’s a legal requirement to have van insurance in the U.K.
There are three main types of vehicle cover available: Third Party Only, Third Party Fire and Theft, and Comprehensive Cover. Further levels of cover are also available should you need it for your business.
It’s a good idea for Tradespeople to consider Goods in Transit as part of their van insurance policy. Vans are usually used to store and transport valuable tools and equipment which can be expensive to replace. Goods in Transit insurance could be considered as vital cover to protect your tools and equipment from damage and theft.
Examples of when van insurance is needed:
- If your van is broken into and tools and equipment is stolen
- If you have an accident which is your fault and the van is damaged
Is Van Insurance Compulsory?
It’s a legal requirement to have the appropriate level of commercial vehicle insurance in the U.K.
What is tool Insurance?
If you run a construction business or you are a self-employed Tradesperson, you’ll know the importance of the tools you use. Without the right tools, you could find yourself turning away jobs resulting in a loss of income.
Tool insurance is designed to protect tradespeople should theft, loss or damage affect the tools used within the business.
The level of risk varies depending on where the tools are stored; however, risks to tools can include:
- weather-related damage such as floods, storms, and fire damage
- malicious damage, vandalism, and theft
- accidental damage
A tool policy is designed to provide protection on the tools you use on jobs. If your tools are lost, damaged, or stolen, a tool insurance policy can replace the tools so that you can continue taking on jobs and earning a living.
Examples of when tool insurance is needed:
- If your van is broken into and tools are stolen
- If a fire occurs on site and the tools are damaged
Do I have to have tool Insurance?
Many tradespeople consider tool insurance as vital. However, it is not a legal necessity in the U.K. It is common for tools to be stored at business premises which are usually covered by the company’s insurance policy. However, this does not cover the tools when they are taken off the premises, kept in a van and used on the job.
Tradespeople should look for alternatives to storing tools in a van overnight as this is a welcome invitation for thieves.
CAR (Contractors All Risk Insurance)
What is CAR Insurance?
Similar to tool cover but more comprehensive, Contractors All Risk is cover provided against the theft, loss or damage of all your tools, plant, and equipment, including those which have been hired for use on the site. A CAR policy can also cover temporary buildings such as on-site houses, project plans and show home contents.
Contractors All Risk (CAR) is designed to protect you against risks such as fire, floods, storms, malicious damage, vandalism, and theft.
Examples of when CAR insurance is needed:
- If a fire occurs at an on-site office destroying essential planning documents
- If a robbery takes place on site resulting in loss of equipment
Is CAR Insurance Compulsory?
Whilst contractors all risk is not legally required for Tradespeople in the U.K., it is considered a useful policy to have in place to minimise the expense of replacing costly tools and equipment.
What happens if Tradespeople don’t have insurance?
If you avoid getting the right insurance and someone makes a claim against you, be it an employee, customer or third party, you will be responsible for:
- paying any legal fees required
- paying any compensation to the claimant
- paying any costs associated with repairs
- paying any costs for tools and equipment that needs to be replaced
If Tradespeople avoid taking out the compulsory legally required insurance, such as Van and Employers’ Liability, they could face prosecution.
It is very rare for businesses to factor the cost of a claim into their finances as the amount is unknown until the claim is made. Claims can be expensive which could leave you and your business in debt. You may even have to close your business entirely depending on the nature of the claim.
The correct insurance policy can remove the financial strain on you and your business, as well as prevent a significant amount of stress associated with dealing with claims.
The cost of a claim will be substantially more than the price of a policy premium and the cost of claims can easily reach hundreds of thousands of pounds, if not millions.
How much does insurance cost?
The cost of insurance for Tradespeople will depend on a number of factors such as the level of cover the business needs and the level of risk involved with the business.
At constructaquote.com, we offer insurance for over 150 different trades.
To find out which policy is best for you, get a quote here, or call our experienced team today on 08081 68 68 68