If you are a contractor, you might count yourself among a whole army of similar traders in running your business as a one-man band on the basis of a sole trader.
Self-employment as a jobbing contractor has all the appeal of being your own boss – but along with the attractions come a number of inescapable risks, responsibilities and liabilities too.
There may be tools, plant and equipment to safeguard against theft, loss or damage, together with claims that might be made alleging your responsibility for causing an accident resulting in someone’s injury or property damage.
Although the role of contractor might be a pretty risky business, however, the good news is that it is easy to safeguard you and your business against these perils with the appropriate form and level of contractors’ insurance.
The insurance may not be obligatory, but it might prove the saving grace for your business when the going gets especially tough and claims come tumbling in.
Why choose constructaquote.com for your contractors insurance?
- We've been helping insure small businesses since 1990
- When you arrange your policy with us, you have immediate online access to your insurance information 24/7
- Our service centre is UK-based in south Wales and is ready to help you with all your insurance needs.
Is contractors’ insurance mandatory?
You are under no strict obligation to have contractors’ insurance, but life is likely to be easier – and your business a lot safer – if you do.
You might find that potential customers make the cover a condition of putting any work your way. Your having insurance shows that you take your profession seriously, with a reputation to maintain as a properly organised enterprise. In the event of any financial claim on your business – through loss or damage to its physical assets or allegations of liability – your business is also safeguarded against what might be potentially crippling demands.
Why does public liability insurance need to be part of that cover?
Whether you are a contractor working on a large building site, or on a client’s private property, your activities involve a certain element of danger. The tools and equipment you are using and the structures you may be making run the risk of causing accident injury to someone or damage to their property.
Practically anyone might be at risk – from your client him or herself, to fellow workers on a building site, suppliers, surveyors, inspectors, neighbours or even passing members of the public.
As the contractor responsible for the works, you have what legal terminology calls a “duty of care”. What this means is that you have a responsibility for ensuring that as far as is reasonably possible, you engage in no action – or fail to take any action – which results in injury to someone else or damage to their property.
If you are in breach of this duty of care, you may be held liable for any injury or damage caused and ordered to pay a substantial sum in compensation as a result.
The amount of compensation you need to pay of course depends on the nature of the injuries suffered or the damage caused. Suffice it to say, however, that the sum may be considerable. For that reason, public liability insurance typically provides indemnity of at least £1 million.
Does employers’ liability insurance need to be part of my cover?
As the term suggests, of course, employers’ liability insurance is relevant only if you are acting as an employer.
If you do employ anyone, however, you certainly do need employers’ liability insurance – the Employers’ Liability (Compulsory Insurance) Act 1969 insists that you have a minimum of £5 million of cover from the very first day that take on anyone in the capacity of an employee.
If you do not have such insurance, you may be fined up to £2,500 every day that it is missing.
Why is the law so insistent? The law is in place because it recognises the special duty of care that you owe any employee to provide them a safe and healthy working environment. If they suffer an injury at work, or contract an illness or other medical condition, and it appears to have been through some action of yours as the employer, you may be held liable.
If you are liable for those injuries or illness, your employee – or any past employee – is entitled to compensation and the law is in place to ensure that they receive that payment.
Do I need contractors’ all risks insurance?
This optional form of insurance is a handy and useful umbrella under which you may protect and safeguard important business assets such as the tools, plant and equipment which you may be using in your capacity as a contractor.
Other insurance for contractors
If you have a business vehicle, making sure that it – and your important contents – are properly protected also makes sense. We can help with your business insurance needs, offering you affordable, quality cover.