Business insurance for trades: what you actually need
Insurance is one of those costs that feels like money down the drain right up until the afternoon it isn't. A dropped pipe wrench through a customer's shower tray is an annoying day. A burst pipe in a flat that soaks three below it is a claim that could end a one-van business.
Here's what each type actually covers, which ones are genuinely necessary, and the bits of the small print that catch trades out. Legal requirements and limits change — confirm the current position before relying on it, and read your own policy wording, because cover varies enormously between insurers.
Public liability — the one everybody needs
What it covers: injury to other people, and damage to their property, caused by your work or your presence on site.
It's not legally required for most trades, but in practice it's non-negotiable: many customers ask for it, most main contractors demand it, and a lot of merchants, letting agents and local authority frameworks won't deal with you without it.
Common limits are £1m, £2m, £5m and £10m. What to choose depends on who you work for:
| Work | Typical requirement |
|---|---|
| Domestic, houses | £1m–£2m usually fine |
| Letting agents, small commercial | Often £2m minimum |
| Main contractors, local authorities | Frequently £5m, sometimes £10m |
The jump in premium between £1m and £2m is usually small. The jump in what you can bid for is not. Look at what your target work asks for and buy that.
Watch for: whether it covers work at height, hot works (soldering, grinding, torch-on), work in occupied properties, and damage to the thing you were actually working on — which is often excluded and is exactly what a lot of trades assume is covered.
Employers' liability — legally required the moment you have staff
What it covers: injury or illness to your employees caused by working for you.
This one is a legal requirement if you employ anyone, with a legal minimum level of cover and penalties for not holding it. The catch is who counts as an employee — it can extend beyond people on your payroll to labour-only sub-contractors, casual help, and family members working for you. If someone works under your direction, using your tools, on your instructions, don't assume they're outside it.
If you're genuinely a one-person business with no help of any kind, you generally don't need it. If you ever put a lad on for the summer, you do — and on day one, not when you get round to it.
Tools cover — small money, high frequency
What it covers: theft of and damage to your tools.
This is the claim trades actually make. Van break-ins are common, and a full kit is thousands to replace.
The small print is where this lives or dies:
- Overnight in the van is frequently excluded or restricted — commonly requiring the van to be locked, alarmed, and sometimes garaged or off-street between certain hours. Read this clause specifically. It's the single most common reason a tools claim gets refused.
- Single-item limits — a policy with £5,000 of cover but a £500 per-item limit doesn't replace your expensive kit.
- New for old vs indemnity — indemnity pays depreciated value, which won't buy you a replacement.
- Hired-in plant is usually separate, and hire companies will hold you liable for it.
Keep a list of your tools with serial numbers and photos, updated when you buy something. Ten minutes now, and it's the difference between a paid claim and an argument.
Van insurance — get the right class of use
Your van needs proper commercial vehicle insurance, and the two details that matter are:
- Class of use. "Carriage of own goods" covers your tools and materials. If you carry goods for others, that's different (hire and reward) and a personal or carriage-of-own-goods policy won't cover it.
- Goods in transit, if you're carrying customers' materials or equipment. Not the same as tools cover.
Insuring a work van on a private policy to save money is a false economy — a claim gets refused and you're driving uninsured in the eyes of the law.
Professional indemnity — if you advise, specify or design
What it covers: financial loss caused by your professional advice, design or specification being wrong — as opposed to your physical work causing damage.
Most hands-on trades installing to someone else's design don't need it. You probably do if you:
- Design or specify — sizing a heating system, designing an electrical installation, specifying a structure
- Do design-and-build on anything meaningful
- Issue certificates or reports — EICRs, surveys, energy assessments
- Work for clients whose contracts require it (many commercial and public sector ones do)
The classic claim: you specified a boiler that turns out to be undersized, and the fix isn't a repair — it's a whole new installation. Public liability won't touch that.
Contract works / contractors' all risks
What it covers: damage to the work in progress itself — fire, flood, theft, storm, vandalism — before it's handed over.
Relevant if you're doing bigger projects where a part-built job represents serious value: extensions, refurbs, new builds. On a bathroom refit it's rarely worth it. On a £90,000 extension where a storm takes the temporary roof off, it very much is.
Often bundled with cover for own plant, hired-in plant, and materials on site.
The ones worth considering
Personal accident / income protection. If you break your wrist, nobody pays you. There's no sick pay when you're self-employed, and for a one-person trade this is arguably the most under-bought insurance there is. Look at the deferment period (how long before it pays) and whether it's "own occupation" — a policy that stops paying because you could theoretically do an office job is not much use to a bricklayer.
Legal expenses / commercial legal cover. Often cheap as an add-on, covers legal costs in disputes — including chasing debts. Worth a look if you do commercial work, where a dispute can get expensive fast. Related: what to do when a customer won't pay.
Product liability. Usually bundled with public liability. Covers goods you supply as well as work you do — relevant if you're supplying materials, which most trades are.
Financial loss / consequential loss. Where your work causes loss that isn't physical damage — you shut a shop's power off for a day and they lost trade. Frequently excluded as standard.
What it roughly costs
Genuinely impossible to give a useful number, because it swings on trade, turnover, claims history, cover level and what work you do. A sole-trader domestic plumber with a clean record and £2m public liability is at the cheap end; a roofer doing commercial work at height with employees is a different world.
What's true across the board: it's a business expense, so it reduces your taxable profit, and it should be in your day rate — not treated as a surprise. If you haven't costed it into your rate, how to work out your day rate has the sum.
Five things people get wrong
Buying on price alone. The cheapest policy usually has the tightest exclusions, and you find out which ones on the worst day of your year.
Not declaring the work you actually do. If your policy says domestic plumbing and you're doing commercial roofing, you're not covered for the roofing. Tell them what you really do, including the occasional job outside your normal patch.
Assuming the van clause is fine. Read the overnight tools wording. Then read it again.
Letting it lapse mid-job. A gap of a fortnight is a gap in cover for anything that happens then — and for claims-made policies, potentially for past work too.
Not keeping the certificate handy. Customers and contractors ask for it constantly. Keep a PDF on your phone. Being able to send it within a minute of being asked wins work — it reads as someone who's got their act together.
The one-line answer
Every trade needs public liability; anyone with help needs employers' liability by law; almost everyone should have tools and proper commercial van cover; add professional indemnity if you design or certify, contract works on bigger projects, and think seriously about income protection because nobody else is going to pay you when you can't work.
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