What is insurance for contractors?
Contractor insurance is an insurance policy designed to protect contractors from the various risks associated with their profession or trade. It typically includes multiple types of cover to ensure that contractors are adequately protected from the financial impact of accidents, damage, or claims related to their work.
Depending on your industry and business size, a contractor insurance policy might need to cover liability, property damage, and even legal expenses to provide you with the peace of mind to carry out your work confidently.
Liability insurance for contractors
One of the key aspects of contractor insurance is liability cover, which protects you if something goes wrong during your work. There are different types of liability insurance, each designed to protect contractors from different kinds of claims.
Public liability insurance for contractors
Public liability insurance is essential for contractors who interact with clients, customers, or the general public. This type of coverage protects you in the event of damage to property or injury to a third party while on the job.
For example:
- A tradesperson might be accused of causing a slip and fall accident if the tools they left on the floor are the cause.
- A builder dropping a brick on the neighbours’ conservatory will be asked to pay for the damage to the property.
- A food stall operator contracted to provide refreshments for an event may be accused of food poisoning resulting from contaminated food.
- A property consultant can face claims of damage to or theft from a property if something happens on their watch.
- A contractor using their equipment or machinery may be accused of causing an accident by poor equipment maintenance.
- Causing an accidental injury to a member of the public can happen to anyone at any time.
It is essential to consider your work settings when deciding whether contractor public liability insurance is for you. Your profession and claim history will determine cost factors, but remember that even a tiny policy limit is better than not having it.
Professional indemnity insurance for contractors
If your clients pay you to use your skills and expertise to solve a problem, you will need professional indemnity insurance as part of your contractor's liability insurance.
Professional indemnity provides legal defence paid for by the insurers if you face a client accusing you of a costly mistake. If it comes to it, and you are required to pay compensation, contractor professional indemnity insurance will be there for that, too.
Employers’ liability insurance for contractors
If you employ staff or hire subcontractors, employers’ liability insurance is a legal requirement in the UK. This insurance covers you in case one of your employees or subcontractors suffers an injury or illness as a result of their work.
The policy covers medical costs, legal expenses, and compensation claims. Without it, you could face significant fines or penalties from the Health and Safety Executive (HSE) if an employee is injured on the job.
Other business insurance for contractors
In addition to contractor liability insurance, contractors may also need business asset protection while in an office, a workshop, retail premises or in transit. This ensures that your business assets are covered in the event of loss, theft, or damage.
Commercial legal expenses Insurance
Commercial legal expenses insurance covers the cost of legal disputes related to your business. Whether it's a contract dispute, employment issue, or debt recovery, this insurance helps cover the fees associated with legal proceedings, including lawyer fees, court costs, and compensation claims.
Business equipment and tools
Your equipment and tools are essential to your work. This cover protects them against theft, loss, or damage, ensuring you can get back to work quickly.
Stock & materials
Both professionals and tradespeople often need to buy stock and materials to carry out their jobs or services. Sometimes, a lot of cash is tied in stock so it is quite important to have insurance to protect it against theft and malicious damage.
Owned & hired in plant
If you are in trade and use large machinery or equipment, plant insurance covers it against theft or damage. This ensures you’re not left footing a hefty bill if something happens to the hired equipment.
Contract works
Certain types of tradesmen benefit from contract works insurance, which protects ongoing projects against damage or unforeseen incidents. For example, if a partially built structure is damaged by fire or vandalism, this cover ensures the costs of redoing the work are taken care of.
