How to pick the right tradesperson insurance

Having the right tradesperson insurance makes all the difference when things don’t go to plan. But when time is short, researching insurance can seem like a task you never get round to. Here's how to find the right cover for you.

It’s worth making sure you’ve got the cover you need, as having the right tradesperson insurance will be an essential lifeline for your business if things go wrong.

So, keep reading to learn everything you need to know about finding the right insurance for your trade business.

What to look for in small business insurance

What insurance do you need? Simply put, it will depend on the type of work your business does.

It’s also influenced by the number of employees you have and the type of properties you’re working on.

Business insurance is made up of different types of cover, depending on the risks your business faces. Understanding each of these, and how they apply to your business, can help you select the level of cover you need.

In other words, insurance that’s perfect for a solo tradesperson working on domestic properties may not be sufficient for a trades business. Especially if you have multiple employees, and your work covers commercial buildings.

Here are some scenarios and the insurance that could cover these risks:

Cover that protects you if an employee claims compensation

This is called Employers' Liability Insurance.

If your business has employees in the UK, then you are usually legally required to have Employers' Liability Insurance. In addition to not being able to cover the claim, not having the correct employers’ liability cover could result in a fine from the HSE.

If an employee claims compensation for an injury - and it's believed that you as the employer are liable for this - then you may be covered by Employers' Liability.

Cover that protects you if a member of the public claims compensation

This is where you might consider public liability insurance.

Sole traders aren’t treated separately from their businesses in the eyes of the law. This means that if a past customer sues you for any work you’ve completed, you’ll need to make any payments out of your own pocket.

As a sole trader, you are personally responsible for your business.

Replacing lost or damaged tools

You'll need tradesperson tools insurance. If your tools are accidentally damaged, become lost or are stolen this insurance can provide replacement tools or cover the cost to replace them.

In order to cover tools that are stored in an unattended vehicle should they be stolen, you may be required to choose additional cover. It’s always important to read the details of your policy to check what is, or isn't covered.

Cover for things that are lost or damaged when they're being transported

This is Goods in Transit cover. It provides protection if property or goods are damaged or lost when being transported.

Cover for working on site

This is Contract Work Cover. It's for work that’s underway on site and can cover costs to repair or redo work that is in progress and damaged by things like theft, vandalism, fire or flood.

Cover for your plant equipment

This is Own Plant Cover. This cover is for larger items of machinery and equipment that you own.

Cover for hired equipment

This is Hired in Plant Cover. This is for larger items of machinery and equipment that you’ve hired - if you're not sure what plant means in construction, check our guide to construction plant for a rundown.

Finding the correct insurer for your trades business

Decided what types of cover you need? Pick out the right insurance for your carpenter, painter and decorator, or electrician business. Now you'll need to choose an insurer that’s right for your business.

Even with identical cover, there may differences between the support insurers provide, for example if you do need to make a claim.

Tips to find the right insurance company

• Take a look at their financial stability

• Any customer service awards

• Their areas of expertise

An insurer, with years of experience supporting tradespeople may have more knowledge to help guide you through any claim you make.

3 common mistakes to avoid when taking out small business insurance

1. Make sure you use your legal trading name

If your business is limited, then the policy should be in the company name. If you're a sole trader or a partnership, then the policy should be in the names of the individuals.

2. Read the small print

With insurance, the devil really is in the detail. Your policy documents will highlight what is covered, as well as any exclusions or specific scenarios when your insurance won’t cover you.

If you have any questions, it is always a good idea to directly ask for clarification.

3. Keep your details up to date

Business is always changing, and whether you choose to pay for your insurance month to month or up front for the year it’s important not to wait for your renewal to update your insurer of any changes in your business.

If you take on new employees, for example, you’ll want to make sure you have the necessary cover in place should a claim be made.

Some situations where you should contact your insurer and update your details include:

• Taking on employees for the first time, or expanding your workforce

• A change of business address

• Offering new services or expanding into different trades and industries

• Taking on work in a different country

Our recommended insurance partner for our members

The right insurance is just as essential as the tools of your trade. It can protects you and your livelihood from many incidents. It can also provide cover for your clients should anything happen while you’re on site.

To help you get covered and keep on working, we’ve partnered with Superscript to give Checkatrade tradespeople 20% off their PLI*.

Whether you’re self-employed or a small business, work alone or manage a team, you can save on your insurance with Superscript. Alongside PLI, they offer a broad range of other cover including:

• Employers’ Liability

• Tools and Equipment

• Contract Works

• Personal Accident

• Professional Indemnity

For more information on public liability insurance for self-employed tradespeople, check out our public liability insurance blog.

_{Disclaimer: This content has been created for general information purposes and should not be taken as formal advice. Where reference to insurance is made it is for educational purposes and doesn't constitute financial, legal or professional advice – always speak to a professional advisor if you need advice.}

_{*As you’d expect, terms and conditions apply. Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority.}