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  • The essential guide to Tradesman Insurance

    Tradesman Insurance

    Tradesmen are groups of skilled workers, such as builders, electricians, plumbers, carpenters, roofers, gardeners, etc. When you are performing such a trade or service to the public you will need a specialised business insurance policy to cover your obligations towards third party persons and property in the event of an incident, and items such as business equipment, stock, tools and machinery, on-going construction works, compensation costs following any legal claims and other optional extras, depending on the type of work you do.

    A self-employed insurance product which is packaged to include all the relevant liability covers for your business, is called Tradesman Insurance. When you work in such a skilled career it is important to make sure that you have all the relevant insurances specific to your trade, take advice on the types of enhancements that can supplement your cover and confidence you are not paying extra for any covers that you don’t need.

    The main Tradesman Insurance features to look for

    Liability insurances are the main elements making up Tradesman Insurance and most tradesmen will require some form of the following liabilities, although not all are a legal requirement:

    Public Liability for Tradesmen

    Public liability is a highly-recommended product, which provides indemnity against accidental damage to persons and property during your business activities. The insurance will pay for any valid compensation claims brought against you.

    Employer’s Liability for Tradesmen

    Employer’s liability is a mandatory insurance element if you have employees whether casual or permanent. It will ensure you are covered for any injuries to employees of the business. This cover is almost exclusively combined with public liability under a ‘combined liability’ package.

    Product Liability for Tradesmen

    Product liability is a defence against defects to your product that could cause damage or injury to others. Should someone become injured by a product that you manufacture, compensation can then be paid to the injured party in the case of a successful claim.

    Other additional elements that make up Tradesman Insurance include:

    ‘Own Plant’ cover and ‘Hired-In Plant’ cover

    Whether you own or hire equipment that is used for your trade, you may be responsible if it is damaged or stolen. Often the machinery you use will be specialised and expensive so many tradesmen will hire their equipment, which exposes you to compensating the hire company in the event of loss/damage.

    Contract Works Insurance

    This covers you against an insurable event that will stop you from fulfilling your contract before it is complete and handed over to the customer. It provides cover for work that is in progress so that you don’t lose out financially should anything happen to an on-going build. Specifically, relevant to construction projects, Contract Works Insurance, otherwise known as Contractors All Risk Insurance, can cover circumstances where you are nearing completion of a long project yet suffer a fire, flood, storm or vandalism to the extent that you need to repair or completely restart the works.

    Contract works insurance (CWI) can also be underwritten to cover temporary works such as scaffolding or temporary roads on site, and even materials that have not yet been incorporated into the project/build prior to the loss.

    Optional Tradesman Insurance features

    Whilst the construction industry is the most common trade taking up a huge proportion of Tradesman Insurance policies and these features are covered above, there are several optional elements that can be considered including consulting, quoting, working abroad, working on-site, tax investigation, efficacy cover, etc. By speaking to a specialist advisor, you will be able to identify the correct optional elements required for your specific trade, here are a few examples.

    Motor Fleet Insurance

    Many trade jobs involve the use of vehicle including vans, tippers, lorries, cranes, diggers, cherry pickers, excavators, and fork lifts. Fleet insurance will provide cover for all vehicles under a single policy and provide a simple solution for various drivers using different vehicles to ensure a smooth working practice.

    Tradesman Tools and Equipment

    This will cover the tools and equipment that a tradesman uses to carry out their job, against loss, damage or theft. Standard motor insurance will generally not cover the tools and equipment kept inside your van so tradesmen will usually need to purchase additional cover in this area even when they are left locked away in your van.  

    Personal Accident

    As you are running your own business, any sickness or injury that you incur can be costly. Personal accident insurance will cover you in this instance and can even look to include permanent injury or death.

    Are Tradesman Insurance Policies the best route?

    Tradesman Insurance policies are underwritten on a per capita basis, meaning the cost will depend on the number of people working for the company. In the instance of larger businesses, it may be beneficial to look at a wages & turnover based cover.

    As the name goes, these are based on turnover and estimate annual wage payments rather than number of employees and therefore eradicates regular administration of your policy if the changes are small and infrequent.

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