There is a whole army of different types of tradespeople out there. If you are one of their numbers, you might already have thought about the need for tradesman insurance – and if not, you might soon appreciate some of the reasons why it might prove highly valuable in protecting you and the future of your business.
The main reason for this is the surprising range of different liabilities which you may face simply by going about your trade. For every liability, there is the possibility of your being ordered to pay substantial damages if you are held to be responsible for someone else’s financial loss – or, even worse, their injury.
Tradesman liability insurance not only helps to defend the financial status of your business but also your reputation. By arranging it, you showcase your professionalism to your customers, that you take your business responsibility seriously and are well enough organised to have arranged the appropriate protection.
The reassurance you provide your customers may help to win projects which you might otherwise not have secured.
What’s covered by tradesman liability insurance?
As is fairly obvious, one trade may differ substantially from another – the nature of your own business might be quite different to another person in a different trade.
For those reasons, tradesman liability insurance also needs to be sufficiently flexible and versatile to cover a wide range of activities and businesses.
Nevertheless, there are some liabilities you may be likely to face whatever your trade, so it might be helpful to consider some of these and the impact they may have on your business.
Do you need employers’ liability insurance?
If you employ anyone else to help run your business, the answer is a very definite yes. Many trades may be carried out on a single-handed basis, but as your business grows and you take on one or more employees, the law says that you must have employers’ liability insurance.
The reason for this law is so that any employee who holds you responsible for an accident and injury suffered at work, or the development of some illness or longer-term medical condition which arises from their employment with you, is assured of receiving the compensation to which they are entitled.
The requirement is taken sufficiently seriously and robustly that you may be faced with fines of up to £2,500 for every day that you do not have this liability insurance.
The law also stipulates that the minimum amount of cover you have is no less than £5 million. Not only do the policies we arrange recognise that legal minimum, but as a matter of course go several steps further by providing you a generous £10 million of cover.
You might also need public liability insurance
When your customers hire you for the trade in which you are skilled, they are putting a good deal of trust in you.
That trust anticipates that the works you complete are safe and structurally stable and that during the course of the work you do, nothing is likely to cause injury or property damage to others – either your customers, visitors to their home or commercial premises, neighbours or the public at large.
Not only is it a question of trust, but a firm expectation and requirement on your part. If you are found to be responsible for errors or mistakes which lead to any injury or property damage, you may be sued for compensation.
Depending on the injuries you have caused or the extent of damage sustained, the amount of compensation you are ordered to pay may be considerable – a sum that may well be beyond the reach of even a medium sized business. And if you are unable to pay, of course, this may spell bankruptcy for your enterprise.
When tradesman liability insurance includes sufficient public liability cover, any such claim may be safely met, without driving your business to the wall.
Are you aware of your product liability?
A tradesman might often overlook the fact that he has a liability for the products supplied during the course of his work.
Even though the products are likely to carry their own manufacturer’s warranty or guarantee against defective workmanship, the tradesman using them also carries a responsibility for ensuring that they fit the purpose for which they are intended and do not fail.
If the failure of a product you have supplied results in financial loss – or injury – to your customer, you may also be held liable.