Tradesman insurance is as important as the tools in a tradesman’s toolbox, but many tradesmen don’t actually know what it covers. And that’s understandable because most tradesmen are busy with their own jobs and leave the insurance side of things to people that specialise in providing tradesmen insurance cover.
Tradesman insurance is provided as a package that contains a number of different types of insurance cover. There is a core cover – Public Liability Insurance – that is included in every tradesman insurance package because it is essential. There are other optional extra covers that can be added for a small additional premium.
Public & products liability insurance
Public and products liability insurance cover you against claims that are made against you by members of the public that allege you have injured them or caused their property to be lost or damaged.
The public and products liability insurance in a tradesman insurance package should also contain an extension to cover claims made against you for pure economic losses, but it is important to check that this is the case because some policies do not contain this extension.
Often, tradesmen wonder why the public and products liability insurance comes with such a high indemnity limit. The standard indemnity limit is £1,000,000 and many tradesmen decide to increase that limit.
The answer is that liability claims can be unbelievably expensive. Even a minor injury will cost in the region of £1,000. Something like a sprained ankle where total recovery is possible will cost upwards of £10,000. An injury that results in a permanent problem for the injured person could cost ten times that amount, and in cases where the injured person is permanently paralysed, that £1,000,000 may well not be sufficient.
Of course, these figures are just for the amount of compensation payable for the actual injury. Loss of wages, legal defence costs and other expenses will usually be added to these figures.
In addition to public and products liability insurance, tradesman insurance can be extended to provide a range of other covers.
If you are employing people, employer’s liability insurance is a legal requirement and the tradesman insurance package can be extended to include this cover. This covers you if an employee makes a claim against you for compensation following an injury at work.
Your contract works and materials can be insured, although not the existing structures, which should be insured by their owner. If you extend your tradesman insurance to cover contract works, any temporary buildings you are using on site would also be covered for loss or damage.
Personal accident and sickness cover is one extension that people often overlook, but if you are self-employed, having this cover can be vital if you have an accident that means you’re unable to work, either temporarily or permanently.