What Insurance Does a Tradesperson Need?

By law: insurance for any vehicle you drive for work (with business use on the policy), and Employers' Liability insurance once you take someone on.

Not required by law, but most trades think about: public liability, tools cover and others below. Customers, building sites and contracts often ask for public liability.

A policy only pays out within its wording, limits, excess and exclusions. Having a policy with the right name doesn't mean every job, tool, van or claim is covered. This guide explains how it works; your insurer or broker is the one to check your own cover with.

• Policy: your insurance agreement.
• Schedule: the page or two listing exactly what you're covered for, the limits and your details.
• Wording: the full rules of the policy. The small print.
• Excess: the part of each claim you pay yourself.
• Exclusion: something the policy says it won't pay for.
• Limit: the most the insurer will pay, for a claim or for one type of thing.
• Broker: someone who finds and arranges insurance for you, often paid by commission from the insurer.
• Authorised: allowed by the FCA (the Financial Conduct Authority) to sell insurance. You can check on the FCA register.

Vehicle insurance: any vehicle on the road must be insured, and the policy must include business use if you use it for work.

Employers' Liability: once you take someone on, you'll almost certainly need it, with cover of at least £5 million from an authorised insurer. Without it, you can be fined £2,500 for every day you're not properly insured. You must also let your staff see the certificate, or face a £1,000 fine. There are a few exceptions, such as some family members.

Most trades think about several separate risks:

• Public liability: if you injure someone, or damage their property.
• Professional indemnity: claims about your advice or design work.
• Tools: set types of theft, loss or damage to your tools.
• Van: using your van, and sometimes what's in it.
• Contract works: damage to work in progress and materials on a job.
• Personal accident: payouts if you're injured.

The name isn't enough. Read the schedule and the wording.

What you really do, not the nearest cheap description.

Tell your insurer when your work, turnover, staff, premises or kit changes, if the policy says so. Wrong or missing information can mean a claim isn't paid in full, or at all.

Check these in your own policy:

• The excess, and limits within the policy
• Tools left in the van overnight
• Security rules and the proof needed
• Limits on height, depth, hot works or hazardous places
• Rules about subcontractors
• Whether putting right your own faulty work is covered
• Knock on losses and advice
• Where you're covered, and from when

Compare the cover, not just the price:

1. Check the insurer or broker is authorised on the FCA register ↗.
2. Declare everything you do.
3. Check what any contracts need you to have.
4. Understand the limits and the excess.
5. Read the main exclusions.
6. Check the tool, van and overnight rules.
7. Save the claims phone number.
8. Keep your details up to date at renewal.

A broker can help if your work is specialist, high risk or hard to describe.