Tradespeople and construction insurance provide coverage for the financial loss incurred due to claims made against contractors and subcontractors. It generally covers public liability, tools, contract work, hired-in plant, van and personal accident options. Minimum levels of cover are available for housebuilders and licensed bricklayers. The maximum levels of cover depend on the type of policy.
What Does Tradesperson Insurance Cover
The cover is usually subject to a standard set of conditions that may need to be modified in certain circumstances, for example, when working at height or in confined spaces. The insurance will be invalidated if an insured tradesperson is not personally covered by professional indemnity insurance.
What Types of Tradesperson Insurance Are There?
Employers’ liability cover is also available for businesses. This can be taken out with or without public liability or professional indemnity cover and entitles the employer to recover any costs incurred in defending a claim against an employee, including alleged negligence by any staff member. For a successful claim, you have to ensure that any work has been completed following your policy terms and conditions.
The insurance company may request written confirmation that some special equipment or clothing has been provided to reduce the risk of injury. For example, safety boots or hard hats or restrictions on working at height have been put in place. Another cover can include criminal legal expenses cover.
A contractor’s main insurance cover does not include cover for the works or materials, but this may be provided under a separate policy such as workmen’s compensation. Trade union members are entitled to one-third of their third party indemnity policy premium to compensate for the lack of workmen’s compensation cover. Construction professionals are required by law to obtain their insurance coverage.
Is Tradesperson Insurance Essential?
As with any insurance cover, the insured will be covered only if the policy is valid, the terms and conditions of the policy are complied with, and any exclusion clauses do not exclude it. The insured must also inform the insurer of any potential claim without delay and comply with all reasonable requests for information to enable a claim to be settled quickly and efficiently.
Failure to do so may invalidate the policy, as will failure to provide the insurance company with the information they require. In particular, no insurer will pay a claim that is not reasonably satisfied that the losing party was at fault.
In addition to insurance cover for those working on-site, it is now possible to take out employer’s liability insurance that covers a contractor or subcontractor for work carried out by their employees or agents. This allows an employer or principal contractor to insure losses incurred as a result of a third party claiming one of its employees, service providers or another third party who has been hired in by it.
Anything Else You Should Know:
Tradespeople and construction insurance usually comes in a one to five-year term. However, longer-term policies are available for auto and marine traders and tradespeople who use many plants. So you buy the insurance from the month you start trading until the month after your last job or job completion. Contractors and subcontractors who have regular jobs can get a policy covering them for any of the above. The premium will depend on the type of work, the amount of business and other factors.
Tradespeople and construction insurance is usually sold through an agent, broker or directly by the insurer. An agent can buy it for you, so there is no need to shop around. But you should ask for a quote if you are unsure or have any questions. There are usually two types of policies available to traders.
The primary policy will cover the contractor, its employees (including subcontractors) and agents (even if they are not members of the trader’s firm). This includes any other people who work on the job. The primary policy covers the work, tools, plants and vehicles of the contractor’s business. The maximum liability is often £5 million, which is reduced by 80% if not more than two people are injured.
The secondary policy will cover traders’ family members (spouse, civil partner or children under a certain age, for example, for insurance purposes). It adds another person to repay the trader’s business if things go wrong. Buy separate policies for your workers and their families. You can also get coverage of their assets in addition to the liability of both policies if either one becomes invalid.
The insurer will also need to be satisfied that the insured tradesman is covered by professional indemnity cover to protect them against negligence claims. This is also known as the ‘All Risks’ cover. It is not usually part of the policy, but it may be possible to add this at an extra premium. This will cover some property damage, although property damage liability does not usually form part of the policy. A contractor or subcontractor must select such cover as part of the policy to be covered by professional indemnity. This is because of the liability that they may face if they are found to be negligent.
Find out more about the importance of insurance here.
Other useful links about business insurance:
Arts & Entertainment Insurance
Business Building Insurance
Architect & Surveyor Insurance
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