What is Tradesman Insurance?

Tradesman Insurance is a type of business insurance designed to protect self-employed traders and small businesses. The cover is beneficial to hundreds of different trades including Plumbers, Builders, Painters & Decorators, Electricians, IT Professionals, Surveyors, and Retailers. These policies cover many potential events which may affect a traders ability to operate their business or, in the case of compensation claims, to protect them from large financial losses.

The first thing to note is that Tradesman insurance policies vary hugely depending on the insurer and the product they offer. The policies are offered under a variety of product names for example; Business Insurance, Tradesman, Master Tradesman, Self Employed Insurance or Contractors Insurance. There is no set template of the lever cover they offer - some policies may only offer two or three sections while others may offer dozens of choices to tailor the product to your specific needs! Some sections may be a legal requirement (Employers Liability), others may be a condition of a contract you have (Contract Works) and others are just personal choice depending on your trade an attitude to risk.

Some of the most common types of cover you can include in your tradesman policies are listed below along with a summary of why you may want to consider each one;

Public Liability

This provides cover for any injury caused to a third party, or any damage caused to third party property. You can normally choose the limit of indemnity you want from £1 million, £2 million or £5 million.

Examples

A member of the public who is claiming compensation after walking in to your premises and injuring themselves – for example slipping on a liquid spill.

A member of the public claiming for damage to their vehicle after a piece of scaffolding that you erected to complete some building work fell onto it.

Employers Liability

This cover is a legal requirement if you have any employees. The purpose is to give cover for any legal costs or compensation claims made against you by your employees for injuries and illnesses incurred while working for you.

Example

A previous employee, who operated heavy machinery while working for you for 20 years, has suffered hearing loss and the medical professionals have attributed this to his work for you. The employee may claim against you and this would be covered by your employers liability cover.

Contract Works

Contract Works provides cover for tradesmen such as builders in respect of work that is in progress on a site. It will cover costs of repairing a project that is damaged by insured events like fire, storm or theft. Cover can also include replacing materials on site or being transported to the site (as long as they relate to the project).

Example

A builder is mid-way through construction of a new build property when a fire breaks out overnight, destroying the progress so far. Contract Works insurance will cover the cost of reinstating the build to the point it was at when the fire occurred. This will include cost of materials, labour and tools.

Own Plant

Covers damage to plant owned by the policyholder whilst at the contract site, in transit or at the policyholders’ premises.

Example – A break in at the site overnight results in vandalism to an excavator being used in the construction project. Contract Works will pay the damage to be repaired.

Hired Plant

Similar to Own Plant but covers plant that is hired by the policyholder

Tools

Covers damage or loss of hand tools or hand held portable power tools owner by or hired to the policyholder.

Example – Theft of Tools that were stored overnight within a locked container on site. (NB most policies will exclude cover if the tools are not secured within a locked building, container or vehicle)

Goods in Transit

This section covers goods that relate to the business, whilst in (or being loaded or unloaded from) any motor vehicle either owned by you or under your direct control.

Example – your hand tools are stolen from inside your locked vehicle, which in turn, was stored within a locked garage at your business premises. This section will provide indemnity to replace the tools up to the agreed value stated on the schedule.

It is important to remember that different policies offered by different insurers will have their own unique endorsements and exclusions. As with all insurance, a lot of the exclusions are based around best practises in order to reduce the likelihood of a claim. For example – tools need to be put away inside a locked vehicle or building and projects under construction must not have had work suspended for a period of more than 30 days (abandoned sites are hotspots for thieves and vandals!)

If you are interested in this type of policy, ensure you speak to a professional broker who can guide you to the most suitable product for your needs.