Chris Pendrey, SHEQ Manager at Actavo Direct gives five top tips for having the right cover as a self-employed worker in the trades.
Going self-employed brings benefits in flexibility, time management and more. However, with the full burden of contract work falling on one person, it’s vital you’ve got the correct insurance to keep you covered if the worst happens.
That’s why Actavo Direct has put together a guide to insurance for self-employed tradesmen.
Going public
Public liability insurance covers you against legal costs or compensation if you’re sued by a member of the public.
This keeps you covered if you damage someone’s property while working on a domestic job, or if someone happens to get injured while entering or walking around your site.
As a self-employed trader, you likely won’t have the protection of big business behind you if you get into trouble, so taking out public liability insurance is recommended.
Making it personal
As a self-employed worker, you’re relying on yourself to be able to go to work every day and earn a living to keep your business afloat. So, if you find yourself injured, ill or unable to work, you could find yourself in financial trouble.
Taking out personal accident insurance (also called personal accident and sickness insurance) keeps you covered if you’re temporarily unable to work. You’ll be able to claim a weekly allowance to cover any missed work you’d have completed if you were fit and healthy.
If you suffer a permanent injury or illness which means you’re unable to return to your normal trade, you’ll receive a lump sum from your insurance. This will help you while you look for new work or train for a different trade that isn’t affected by your illness.
Covering legal costs
For many industries, professional indemnity insurance (also called professional liability insurance) is non-negotiable, and part of requirements. However, for many self-employed tradesmen, it’s simply a way of protecting themselves against any legal costs as a result of allegations from clients.
If you provide a service your client isn’t happy with, professional indemnity insurance will help you pay legal costs of any action taken and could save you in the long run against court costs or settlement fees.
In some instances, a client may even request evidence of professional indemnity insurance before agreeing to work together.
Need a hand?
As a self-employed trader, you may occasionally need to hire temporary or short-term employees to help with bigger projects. However, even if you’re just bringing them on board for a short or one-off project, you’ll still need employer’s liability insurance.
Employer’s liability insurance covers you and your employees against any costs or loss of business related to your employees. This includes losses incurred from illness or injury to employees, plus any medical costs or legal fees you may face as a result of injuries on the job.
If you’re found to be employing someone and can’t provide proper employer’s liability insurance, you could be fined up to £2,500 for every day you fail to provide the proper coverage.
Other considerations
If you’re using a vehicle to drive to different sites for business, you’ll probably need specialist business car insurance, as your personal policy won’t cover it. Otherwise – if you’re involved in an accident while driving for business – you could be left to pay any damages out of your own pocket.
As a self-employed tradesman, you’ll need tools – and they can be expensive. Equipment insurance will usually cover any damage to your tools, plus accidental loss or theft. If you keep your tools in a building or at home, you may also want to take out contents insurance to cover any damage while your belongings are stashed away.
Taking out credit insurance will protect you if your customers can’t pay for any reason. If customers go bust or can’t fulfil an invoice in time, you could be left to take the hit. Credit insurance will keep you covered if this happens.
