A guide to tradesman insurance

David Woodfield
By David Woodfield, Insurance Director

Large or small, your business is likely to need insurance of one sort or another - from buildings insurance for your premises to professional indemnity insurance in the instance of a client taking legal action against your company, you need to make sure your business is protected against the specific risks it faces.

Getting the right type of business insurance to match the needs of your company is very important - get the wrong type or level of cover, then you may not be insured for certain events, which could prove ruinous for a small business.

What is tradesman insurance?

Tradesman insurance is a very specific type of business insurance for people who work in particular fields or trades. These tend to be people who run businesses where the work takes place outside their business premises - ie in customers' homes or businesses.

Typical trades that might need tradesman insurance are builders, decorators, electricians, or cleaners, but there is a huge range of professionals and businesses for whom tradesman business insurance might be worth looking into. This is because it provides protection against certain costs that are associated with these professions. 

For example, a tradesman might need public liability insurance because their work is more likely to result in damage or injury to a third party. Similarly, a person working with tools might want tradesman-specific tool insurance, particularly if they are self-employed and responsible for all business costs.

Do tradesmen need insurance?

It is not a legal obligation to insure yourself as a tradesman, but it is recommended to save you hassle in the long run. A lot of tradespeople have expensive tools and can't work without them. If something was to go wrong, would you have the money to instantly replace your tools? If the answer is no, then insurance can give you the peace of mind you need.

Additionally, a lot of clients choose not to work with tradesmen who don’t have valid insurance, so this is something to keep in mind too.

What does tradesman insurance cover?

As with most types of insurance, what is covered by tradesman insurance will vary from policy to policy. As a rule, the more expensive your policy, the more things that are covered. But not all the things that can be covered by tradesman insurance may be suitable for your business.

Common elements of tradesman insurance include:

  • Public liability insurance - Protects against legal fees and compensation costs if you are sued by someone in relation to your business
  • Employers’ liability insurance - Covers claims from employers if they are injured at work
  • Personal accident insurance - Covers costs if you are unable to work because of an accident at your business
  • Tool, plant or machinery insurance - Protects against the cost of damaged, lost or stolen equipment
  • Business building cover - Cover for damage to your business premises

Are there any exclusions to tradesman business insurance?

Again, what is and isn’t included in your tradesman insurance will vary from policy to policy - and it’s always vitally important to read and understand your policy documents. Nevertheless, there are some things that are commonly excluded from tradesman business insurance.

Most policies won’t include cover for tools or equipment damaged as a result of wear and tear. This kind of damage wouldn’t be covered by personal tool insurance in the UK either, but if you are lucky, your warranty may help in situations where tools are damaged in this way.

Some insurers will also have a ‘single item limit’, which places an upper limit on the value of any single item of equipment you can make an insurance claim for.

Other things that may prevent you from making a successful claim include if you don’t have the right security features for your premises, or if your behaviour is seen as irresponsible. 

Are there any additional cover options?

In reality, there are almost as many tradesman insurance policies as there are types of business. And in addition to the standard cover options explained above, there is normally a choice of optional extras, which all come at a price.

The most common extras that businesses and tradesmen opt for include personal accident cover, which insures your company against loss of earnings should you fall ill, have an accident, or die. Similarly, you can opt for jury service cover, which protects you from loss of earnings as a result of jury service.

Other things, such as van insurance and efficacy cover - which protects you against claims from customers in cases where a product or service you provide fails to do the job it was supposed to - are other commonly offered options.

Do I need to insure my tools as a tradesman?

Again, it is not a legal obligation to insure your tools, but it is a good idea. Insuring your tools means you won’t have to halt running your company if your tools are damaged, lost or stolen.

How much does tradesman insurance cost?

How much tradesman insurance costs really is a ‘how long is a piece of string’ question. It will depend on a wide range of factors that include your company and personal claims history, the value of your business, and the extent of cover you require.

What type of business you own, where you do business and what equipment you use will also affect the cost of your insurance. The more dangerous your business is deemed to be, the pricier your insurance policy.

The only advice we can give is to shop around and talk to experts about what specific policy you need for your business.

How to reduce the risk of legal action against your tradesman business

The best way to reduce the risk of legal action against your business if you are a tradesman is to ensure you are compliant with all health and safety regulations and deliver a faultless service to customers at all times.

But we don’t live in a perfect world, and legal claims are likely to arise from time to time for many tradesmen.

The best way to protect yourself is by having the right business insurance policy in place. This is particularly important if you operate a small business or you are self-employed.

Sole trader public liability insurance is a type of public liability insurance that a self-employed tradesman could take out. It is probably a worthwhile expense if you work in a potentially dangerous trade. Similarly, if you employ people, it is worth investing in employers’ liability insurance to protect against claims from employees. It could also be worth considering additional types of cover, like workshop insurance and property maintenance insurance

None of these types of insurance will stop claims from happening, but they will add to your peace of mind.

How to get the right tradesman insurance with Bionic

Whatever the size or type of your business, Bionic can help you find the right tradesman insurance policy. 

Our tech-enabled insurance team combine industry know-how with smart technology to help you find the right cover. By talking to you and understanding your business, we will ensure that your policy meets the unique needs of your business and protects it from the specific risks it faces.