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Is Trade Insurance required by law and what cover types do tradespeople need?

Rhino Trade Insurance 03 June 2023

Self-employed tradespeople need insurance to protect their businesses from the crippling costs of unexpected events and liabilities.

Everybody has a different arrangement. Several aspects, such as your line of work, your business’s size, history, and amount of risk exposure, will affect which policies you’ll need - and what they’ll cost you.

Here, we've written all about common types of insurance that tradespeople may need and whether or not it is legally required to hold trade insurance.

Are you legally required to have trade insurance?

UK law does not require a company to hold trade insurance, although there is one type of business insurance that you’ll legally need if you’re an employer - we’ll go into that a little later.  

Despite most types of trade insurance not being legally required, you will likely need to be able to demonstrate you’re covered by Trade insurance before you’re hired to take on certain types of contracts.

For example, trade insurance could be necessary to get particular permits or licences in some business areas, such as building and construction. For instance, a contractor might be required to supply proof of liability insurance in order to apply for a building permit or work on a large project. 

We mentioned one type of business insurance which is legally required. This is Employers' Liability Insurance, and you must have it if you hire anyone. This insurance will cover the cost of claims against your business brought by workers who have been hurt or become ill while on the job. You can be fined up to £2,500 per day for not having this, so if you’re an employer you don’t really have a choice but to take it out.

Overall, although trade insurance is not typically required by law, it is frequently advised for businesses of all sizes to protect against the financial losses that can occur when liability claims are brought, or when your business experiences theft, loss or damage. This is particularly true for those in the trade industry which as you’ll know is littered with dangers and hazards. 

What cover should a self-employed tradesperson consider?

Public Liability Insurance: 

This particular type of insurance covers any accidents, illnesses, or property damage that you might cause to a third party while performing your job. Businesses that deal with the general public or other parties frequently invest in Public Liability Insurance. The cover can aid in defending your company from financial loss brought on by legal claims taken against them, which can be incredibly expensive and detrimental to the company's reputation.

Professional Indemnity Insurance: 

Tradespeople who offer expert advice or consulting services should have this form of insurance. It protects you from any monetary losses a client might incur as a result of your recommendations. The expense of fighting against a claim and any damages that may be issued to the claimant are both covered by the insurance policy.

Professional Indemnity Insurance can offer a vital safety net for trade professionals because even the most knowledgeable and experienced individuals are susceptible to errors or unanticipated events that result in claims being made against them.

Employer's Liability Insurance: 

Employer's Liability Insurance is legally necessary if you have employees. It offers cover for any illness or injury that your employees may experience while working for you. The expense of fighting against a lawsuit and any compensation that could be issued to the employee are both covered by the policy. Medical costs, missed income, and any damages to which the employee may be entitled can be included in this.

Tools Insurance: 

Your tools and equipment are protected by this form of trade insurance from theft, loss, or damage. For tradespeople who depend on their tools to complete their job, this insurance is crucial to seeing your operations aren't interrupted. The outlay of fixing or replacing tools, equipment and gear that have been stolen or damaged is generally covered by a sufficient level of Tool Insurance.

Read more about tool cover here

Personal Accident Insurance:

This insurance can defend you in the event that an injury or illness keeps you from working. This insurance frequently provides cover for a variety of accidents, including those that take place at home, at work or while enjoying leisure activities. It will also pay for accident-related medical bills, lost wages, and rehabilitation expenditures.

Given the nature of your business, its size, and the risks involved, you may want a different kind and level of insurance. In order to choose the precise insurance cover that is most suitable for your company, it is crucial to speak with an insurance specialist, and luckily, Rhino has years of experience delivering policies tailored for the trade industry. 

Choose a great trade insurance provider!

A savvy tradesperson will never choose to pass on trade insurance. Even when there are adequate health and safety procedures in place at work, accidents and incidents still happen. Holding a good level of cover in place will guarantee your business survives should it face claims, as legal costs and compensation settlements can be expensive if a firm is judged to be at fault. 

If any of the above situations ever occur to you, having a seamless process in place will depend on your choice of insurer. Fortunately, Rhino is on-hand to offer a range of coverage options for businesses that ensure your purchase and claims process will be easy. You can select Public Liability cover from as little as £1 million up to a maximum of £5 million and up to £10 million on request. 

Find out how our insurance can benefit your business today. 

Why Talk to Rhino about your Public Liability cover

You can get all the protection you need with Rhino Trade Insurance in one place. Protecting your business with an effective insurance plan is your best bet in a field riddled with risks. Insurance remains your cushion if things go wrong on a job site.

The Rhino team offers a wealth of professional expertise. Our insurance experts have created a variety of straightforward cover choices, such as Public Liability Insurance, Employers' Liability Insurance, Tool Insurance, and more. 

Call us at 0116 243 7904 if you have any queries or would like to get cover right now, or visit our website for a quick price in a matter of seconds. 

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