As you prepare to enjoy the festive season, protecting your trade tools and equipment becomes more important than ever.
A Guide on how to be a Self-Employed Tradesman
So it's time to go it alone. You may have spent a few years learning your trade, shadowing a time-served tradesman or woman, and now you're ready for new pastures. Maybe you wanted to spend a few extra years after completing your trade apprenticeship to save for your own business. If that time is now, we have a handy guide to help any potential self-employed tradespeople looking to start a business.
What should you consider first? What is the best trade insurance when starting out? Are there any laws or other pieces of information I need to know about? Let's answer all of those questions for you now.
So you're going self-employed. What Should I do first?
The first port of call for starting your trade business would be to decide what type of business you want to be. There are a handful of options for anybody setting up a business:
Starting your trade business as a sole trader means that your business is 100% owned and managed by you. This type of business structure means that there is no legal difference between yourself and the business, and any debts or profits are yours. Many tradesmen and women (Plumbers, Electricians, Joiners etc.) will often be sole traders.
The sole trader is personally responsible for maintaining any financial records and deals with the year-end accounts with a bookkeeper or professional accountant. Although this is the most common form of trade business setup, you should be aware that you won't share any of the responsibilities with anybody else. You will most likely work longer hours than your usual 9-5 to keep on top of everything.
A Partnership is extremely similar to a Sole Trader, but they share responsibilities with one or more people. No matter how many people start the business, they will all be involved in the management and maintenance of it. Usually, they will pool all of their experience, expertise and finances to set up and run it.
When setting up a Partnership, details or a document of how each partner inputs the capital, share allocation, profits and losses, and any other vital info will say how they are shared, on top of this, each partner will have to make sure they keep on top of their own bookkeeping and pay their own tax and National Insurance on their individual profits.
A partnership offers various benefits, such as sharing responsibilities, meaning that managing your time is easier. More financial input and partners who will bring tailored expertise to the business - for example, a plumber and a carpenter creating a business.
When setting up a limited trade business, there are two types to know about: a Private Limited Company and Public Liability Company. The first doesn't trade on the stock market, while the second does. So unless you plan to build a company to Elon Musk levels, you will most likely set up a Private Limited Company.
The difference from being a sole trade or partnership is that your business is registered with Companies House, meaning it has its own legal obligations and rights. The ownership of this business is split up into parts called shares and whoever is a company director is a shareholder.
Limited Liability is attached to the business structure of a Limited company. This means that your business will front all contracts, take on debts, pay profits, and employ people as opposed to the company owner(s).
What Trade Insurance should I be looking at?
Whichever trade business you decide to set up, it's best to keep in mind that you should have the right level of trade insurance cover in place. Here at Rhino, we have designed some top policies tailored to almost all trades. Let's see what would work for you:
Public Liability Insurance
For any tradesperson setting up their business, you'd be best served finding a top-quality Public Liability Insurance package. Rhino offers top policies for a fraction of the market price. Public Liability covers you if you injure somebody or damage their property whilst on the job. In the worst-case scenario, it also protects you if you cause accidental death.
Employers' Liability Insurance
No matter the type of trade business you manage, If you take on any employees, you must have Employers' Liability Insurance. This insurance is needed by law and a policy will protect your business if one of your employees manages to damage a customer's property, injure a third party or themselves or cause death due to the work they are doing for you. Find out more here.
Tools in Transit Insurance
As a tradesperson, your tools and your livelihood go hand in hand. Can you imagine your work week without them? That's why it's imperative to get them covered. We've found that tool theft is consistently on the rise, and with all of the lines of defence, you put in place, having a good Tool Insurance policy can really save your bacon. Rhino's Tools In Transit Insurance keeps your weapons covered in case they are damaged or stolen whilst in transit.
Contractors' All Risks Insurance
For anyone who runs a business that works in construction, having Contractors' All Risks Insurance could really help you out. It's been designed to protect you if you are the owner of the contract value. This means that if something goes wrong on the site and you need to rectify work that's already in progress, you won't have to foot the bill personally. Moreover, it will also protect any plant or machinery you use, whether owned or bought.
Legal Expenses Insurance
Rhino's Legal Expenses Insurance does exactly what it says. It protects you if you need legal representation when being taken to court—a popular add-on to our Public Liability Insurance. Find out more about it here.
Professional Indemnity Insurance
If you manage a trade business offering designs and advice, having Professional Indemnity Insurance will keep you safe. Our policies are designed with your trade in mind, so if something goes wrong with that advice and you face a claim, we'll be there to help you out.
Personal Accident & Sickness Insurance
Two prevalent trade insurance policies for self-employed tradesmen and women. If you fall ill and need time off work, don't worry and still get paid. Likewise, if you have an accident on the job and need an extended time off, insure yourself against this risk and have your finances taken care of whilst you're off work. Find out more now.
Tax Enquiry Insurance
Businesses of all shapes and sizes need to manage their own tax affairs. That's why if you have any troubles and have the taxman sending you letters or showing up at your door, then it's good to have Tax Enquiry Insurance. We'll help you if you find yourself in a sticky situation.
Why Choose Rhino Trade Insurance?
Here at Rhino Trade Insurance, we have years of experience in the trade game, so much so that we are deemed specialists in the field. Our policies are tip-top and marketing-leading. What's more, we have thousands of trades up and down the country who trust us with their cover.
Get a quick and easy quote online or give our cracking UK team a call on 0116 243 7904.