Insurance. It might not be your favourite topic, but any self-respecting tradesperson knows the value of having it.
As a self-employed individual, you don’t have a big company watching out for you. There’s no sick pay, paid leave or claims to be made against your employer if you have an accident.
You’re the boss, and with that comes the burden of responsibility to make sure that if anything happens to you or your equipment, you’ve got a safety net.
This is where insurance comes in. You might be wondering which types of insurance you actually need. Let’s find out.
If you're not sure where to start, here are some of the most common insurances for self-employed tradesmen and tradeswomen.
Arguably, the most important type of insurance for any self-employed tradesman is public liability insurance.
To put it simply, this insurance protects you if something goes wrong while you're providing services to your clients. This could be anything from injury to property damage.
So, if a pedestrian trips over your stray wire and breaks their leg, or you accidentally leave muddy footprints all over a customer’s new white wool carpet, they’ll be looking for compensation. If that pedestrian or homeowner succeeds in bringing a claim against you, you could be on the hook for some serious costs.
Public liability insurance means you’re protected from these costs. With Public Liability Insurance, you don’t have to pay things like lawyer’s fees and compensation from your own pocket. This is pretty handy – legal bills can rack up to hundreds of thousands, especially if you go to court and the claimant is awarded damages.
What’s more, most reputable companies won’t touch a contractor with a bargepole unless they have Public Liability Insurance in place. Now how’s that for an incentive?
While Public Liability Insurance protects against claims made by members of the public, Employers Liability Insurance covers claims from your own staff.
Whether they’re working on-site or in the office, having this insurance in place covers any claims from employees, temps or even subbies while they’re performing duties for your business.
So, if they are injured and need medical care and time off work, you can receive up to £5m to cover the costs associated with this.
Also, it’s not nice to think about, but if an employee dies while working for you, employer’s liability insurance will protect you and your business from the financial costs this will bring. Don’t think this could never happen to you. The UK has some of the best health and safety standards in the world, but still, 123 workers died due to fatal injuries at their workplace in Great Britain in 2021.
When it comes to getting Employer’s Liability Insurance you don’t have much choice in the matter – as an employer, having it is a legal requirement.
To say a tradesperson’s van is important is an understatement.
If you're a self-employed tradesperson, we bet your work vehicle is more than just a way to get to and from jobs. If you’re anything like the tradies we know, your van is also your head office, your storage unit, and let’s face it, probably your company canteen.
Unfortunately, most domestic motor insurance policies don't cover using your vehicle for commercial purposes. So, if you do have an accident, you won’t be able to make a claim on your regular auto insurance policy. This will be a nightmare if you don’t want to pay for repairs or a replacement out of your business’s bottom line (and who does?!)
Van Insurance offers a safety net, allowing you to use your van the way it’s intended – for work – while having the peace of mind that comes with knowing that if anything happens, you’re covered.
If your self-employed tradesman business involves producing designs or providing advice, then you should seriously think about getting professional indemnity insurance.
Why, you ask?
Well, if your client follows your advice, guidance or designs and then experiences negative consequences as a result, they can bring a claim against you.
One simple error (such as getting the measurements wrong on a job or installing a faulty system) can cost a fortune to defend and if the decision is upheld in court, you’re looking at hefty rectification costs at your expense.
If you have Professional Indemnity Insurance, you will be financially protected against any such claims and won't need to pay any associated costs out of your own pocket.
The law doesn’t require you to have Professional Indemnity Insurance, but trust us, you’ll sleep a lot better at night knowing you have it.
As a self-employed tradesperson, you rely on a whole load of tools and other equipment which are essential for carrying out your job.
If something happened to them, you’d be up the creek without a paddle. Or a drill, or a sander. You get the idea.
Seriously though, tools getting stolen is a real threat and it’s happening all over the UK, every day. And it goes without saying that tool theft is a major setback for anyone in the trades.
Tool insurance protects your gear from damage or theft while it’s temporarily housed in your vehicle. This cover, while not being a legal requirement, can save you a lot of money in repairs and replacements if your tools are damaged or stolen in transit.
Tool insurance is one of the fastest-growing types of policy for tradespeople – as more and more people realise the benefits of having their kit covered.
Being your own boss is amazing in so many ways, but one downside is that there’s no-one looking out for you if you fall ill or have an accident that means you’re unable to work.
Without the luxury of sick pay, smart self-employed contractors take out Income Protection Insurance instead.
This cover will give you a rolling pay-out of up to £2500 per month for the period of time you’re laid up unable to work. This will come in handy when it comes to keeping your home and business ticking over while you recover.
No-one wants to think about the worst happening, but if you die as a result of an accident, the policy will pay a lump sum of 12 times your monthly benefit amount to your nominated person, so they won’t need to deal with a financial burden on top of everything else.
We see Income Protection Insurance as priceless peace of mind for you and your family for a little over a fiver a month.
Personal Accident Insurance is often taken out as an add-on to Income Protection Insurance.
This type of cover will pay out a lump sum if you fall victim to an accident up to a limit chosen by you, up to £50,000. You can use this money any way you see fit – but it’ll come in handy for the mortgage, bills, and other expenses if you have to miss any work due to your injury.
The accident doesn’t have to have taken place on-site, either. If you can’t work, regardless of where you got your injury, as a self-employed worker you’re going to take a financial hit. So, any good policy will cover you in your personal life, too.
You might not know about this one, but whether you just fill out an annual Self-Assessment tax return or do a full set of company accounts every year then you should get clued up on Tax Enquiry Insurance.
Dealing with HMRC is part and parcel of life as a self-employed contractor. Whether you’re a sole trader or director of your own limited company, you need to report your tax status and circumstances – and that of any employees – to HMRC accurately down to the last number.
With the change in IR35 rules and other reforms affecting contractors, it’s harder than ever to keep your reporting duties straight. And HMRC can open an inquiry against you at any time.
If this happens, it can lead to a costly and stressful battle defending your tax status and that of any subcontractors you use. This means accountants fees, solicitor fees and potentially lost income while you spend days ploughing through your books in an effort to clear your business.
Can you afford to throw tens of thousands at resolving an HMRC dispute in court? With Tax Enquiry Insurance you don’t need to worry about it. This insurance will cover the costs of legal representatives and specialist accountants working hard on your behalf to resolve a dispute with HMRC up to £50,000.
Risk is a part of life. Having said that, we think tradespeople take on more than their fair share.
Week in, week out, you probably work with power tools, machinery, toxic and hazardous substances and find yourself in situations that would see the average office worker needing a change of underwear.
You can’t avoid the risks that come with a life on the tools, but you can protect yourself and your business against the financial implications of something going wrong.
If you’re the type of tradesperson who likes knowing that all bases are covered, Contractors All Risks insurance could be the policy for you.
Let us quickly set a couple of scenes for you.
You’ve probably heard stories like these from others in the trades. Maybe you think, “it’ll never happen to me”. Unfortunately, it could, and these types of events can bankrupt a one-man enterprise or small business.
Contractor’s All Risks Insurance provides cover for works under construction, including partially completed buildings, temporary buildings and any materials included in the construction project. It also covers loss, theft or damage to tools, machinery and equipment either owned or hired by yourself – and those of your employees, too.
There’s no law against going without insurance as a tradesperson (with a few exceptions such as Employer’s Liability Insurance) but scrimping on insurance for your business leaves you exposed to accidental damage, theft, loss of income, legal bills and much more.
Could your business survive the financial hit if your tools got stolen? What about your work vehicle? And how would you pay your mortgage, bills and expenses if you became too ill to work, or had an accident?
OK, we’re not in the business of scaring people. We just want to make sure each and every tradesperson in the UK is aware of the impact these things can have.
Getting cover where you need it is one of the most important steps you can take to protect yourself and your business from anything life feels like throwing at you.
Rhino Trade Insurance are the UK’s industry leaders in insurance for self-employed people. We specialise in insurance for hardworking men and women in the trades – and we do trade insurance better than anyone else.
Don’t just take our word for it. We’re multi award-winning, and the hundreds of 5-star reviews from our happy customers speak for themselves.
Our approach is simple: we offer insurance policies that are easy-to-understand, competitively priced and pay out when you need them to. We don’t make our customers jump through hoops or memorise legal babble, and the process of taking out one of our policies couldn’t be easier.
All our policies are custom-made for tradespeople. Therefore, they reflect the reality of life in the trades. For example, our tools insurance allows you to keep your tools in your van overnight. And you don’t have to wait to get hold of your insurance certificates and policies. We’ll send you your documents in minutes so you can get on with your day.
We think you’ll love our no-nonsense, plain English approach to insurance. Call us today on 0116 243 7904 or head over to our handy quote engine to get a personalised quote in an instant.
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